Buying in a new development
Category Developments
What you need to know about purchasing in a new development
South African home buyers are increasingly on the lookout for properties that offer not just an ideal home, but also a myriad of other bells and whistles, such as security, central location, community living and access to additional lifestyle benefits.
"Sectional title complexes and cluster developments have been really popular in South Africa since the early 1990s, with luxury lifestyle estates starting to proliferate soon afterwards," says Andre van der Merwe, principal of Chas Everitt East Rand. "Having started early, South Africa is among the world leaders in the development of gated lifestyle estates and security complexes, which are now all called community housing schemes. By comparison, these only started to emerge about five years ago in countries like the UAE and New Zealand. However, the accelerating demand for estate homes means that developers here are still under pressure to launch new projects."
What are the benefits of buying property in a new development?
While stand-alone homes are considered favourable by some people for their sense of privacy and the independence they provide, the benefits of purchasing in a new development often outweigh these factors for modern home buyers.
Increased security
Gated complexes with access control typically contract specialist security companies to provide full-time guards, armed response and medical emergency services. Given the high level of crime in South Africa, this is considered a significant benefit for homeowners who spend all day at work with families residing at home, and especially for those who work abroad semi-permanently.
Personal touches
When purchasing in a new development, you will usually be able to customise your new house with finishes and fixtures that make you feel right at home, from the start - no renovations needed.
Minimal maintenance
One of the benefits of living in a newly-built home is that you won't face any major maintenance issues for the first few years - the ultimate convenience for any homeowner. No burst geysers, tumbling roof tiles, broken gutters or electrical faults to chew up your weekend downtime. By law, new homes in South Africa also come with guarantees on the roof and structure.
Stable property value
A property's value relies on many factors, including the area in which it's located and the state of the properties surrounding it. When purchasing a home in a new development, you'll have peace of mind that the complex or estate surrounding you is maintained by the body corporate or the homeowners' association. What's more, due to the high demand for gated estates in South Africa, your house is likely to hold its value well or inflate over the years.
Modern and sustainable living
Retro-fitting older homes with innovative, modern amenities can be complicated and costly. When building a new home in a plot-and-plan development, you have the opportunity to choose modern features such as solar power, insulation, high-speed internet technology, the latest alarm system, home automation and much more. Alternatively, you can seek out a new development where these are being provided, as is increasingly the case.
Save on costs
Choosing to purchase in a new development can save you a substantial amount of money because you will not need to pay transfer duty. The tax on the property, in the form of VAT, will be built into the price you pay. In addition, developers are sometimes willing to subsidise bond registration costs and legal fees for their buyers.
Seamless home finance
Property developers generally have their projects pre-evaluated by all major lending institutions, which makes it easier for their buyers to obtain home loans, as there is no need for individual property valuations. It also gives you peace of mind that you're paying the right price for your home.
Structural defect warranties
New property construction can legally only be undertaken by contractors registered with the National Home Builders Registration Council (NHBRC). This means that you'll receive a five-year major structural defect warranty and a one-year roof leak warranty from your contractor.
Top 3 tips for purchasing in a new development
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Check all reputations - investigate the developer's reputation as well as those of all your contractors, before signing any agreements. Although we tend to buy with our hearts, be sure to involve your head in this major decision!
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Try to buy early - many developers launch their projects with discounted units! In addition, as demand increases for the development, your investment value could increase before your home construction is even completed.
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Purchase the best unit or stand - first investors always get the cream of the crop. By making smart choices right from the start, you stand to earn higher capital appreciation and, for investment properties, you could achieve higher rental income.
In South Africa, we're spoiled for choice in new housing developments, but it's still a big decision for any homebuyer. If you'd like some guidance as you embark on your home-buying journey, contact a Chas Everitt property consultant today.
Author: Chas Everitt