Real Estate: Why used homes are often better than new builds
Many people want their home just for their own build your own wishes. But old buildings also have many advantages and are often associated with not so high risks.
Used houses are more popular
According to a study by Interhyp, Germany's largest mortgage lender, only 30 percent of all mortgage lending is used for new construction while 40 percent serve to buy an old building.
As an old building we refer to this article used real estate, even if they were only once inhabited for a short period of time. In contrast, we designate as new buildings those houses that were recently built and are now being moved in for the first time.
The remaining 30 percent will be used for renovation, modernization and follow-up financing. This is partly due to the price difference between new and used: home buyers have to pay for a new house on average 230,000 euros, while a used property costs only 148,000 euros.
New building: High costs, many risks
Many property buyers are also aware that the risks associated with building a house are often higher than when buying an old building. In spite of low interest rates, new buildings are also considerably more expensive because land prices and construction costs have increased in recent years. The construction project can be calculated on the cost side much more complicated, costs a lot of time and nerves and is more expensive than a used property to buy.
Private builders are often too short
Estimates that the supply of old buildings is about five times as large as the number of new buildings completed per year. In the 1990s, over 100,000 new buildings were built each year in North Rhine-Westphalia. In 2009, this market reached its low point: only 32,000 new properties were built in that year. 44,000 new apartments and houses are expected this year. The demand for existing real estate, however, is consistently large.
If you want to build new, you have it much harder: First, a suitable plot must be found, which is in a good location.
Unfortunately, the municipalities prefer for new Residential areas often construction companies, project developers or property developers. They parcel the areas and then cultivate them with multi-family or terraced houses. Subsequently, they sell the properties complete with land.
As a result, private builders rarely have a chance to even reach a property in an attractive location.
In metropolitan areas coveted locations are already occupied
In addition nor that metropolises such as Munich and Berlin have been growing continuously for decades. The most desirable locations are therefore usually already occupied. Especially in central locations, the supply of free land is scarce. New development areas exist only in the suburbs or on the outskirts. Therefore, old buildings in good locations are as valuable as new buildings. One reason why there is almost no price difference between old and new buildings in these cities.
The existing residential areas, on the other hand, often benefit from their infrastructure, which has grown in the past. They offer:
- A good transport connection
- A comprehensive medical care
- Numerous shopping opportunities
- kindergartens and schools in the immediate vicinity
In comparison, the infrastructure in new housing areas still has to arise.
Conclusion: No offense
No matter whether you decide on a new building or an old building, in any case you should first make sure what exactly you are buying. Thus, during the construction and construction phase, it must be ensured that the finished property corresponds as exactly as possible to the agreed properties in terms of equipment and construction quality. In the case of the old building, the buyer must check exactly whether the property already has serious defects by consulting experts and appraisers if necessary.
It is often better to buy an old building than to build a house yourself. The risks and costs are lower when buying a used property. In addition, old buildings are in an attractive location, especially in large cities, while new development areas can be found on the outskirts or in suburbs. In general, the infrastructure for older buildings is accordingly better.
Artikelbild: © LDprod / Shutterstock