Real Estate

New vs 5yr townhouse or detach

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  • Apr 6th, 2016 4:25 pm
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Sr. Member
Nov 21, 2007
663 posts
103 upvotes

New vs 5yr townhouse or detach

Why would new pre construction townhouse or detach in a similar area would be going for a lot more then a <5yr equivalent?

Is it due to land values of new neighborhoods?

Maybe people prefer new but is it worth to spend >$100k more on a precontruction townhouse >$650k vs a similar unit At $550k which is <5yr old?
44 replies
Deal Addict
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Jan 5, 2003
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Main reason is land value. And because land value is so expensive, the builder puts in more extras to make them more marketable. So you'll have nicer standard finishes, probably more sq footage on the same amount of land usually by sticking another floor on top, ect.

I personally like buying new builds, but it is much more time consuming and requires patience. The average person probably visits a resale house twice for a total of 30-60 minutes before buying it. For a new build you have many appointments, choices to make, and delays. 2 years is normal to wait. But in the current market you're making coin off of two properties for a minimal amount of extra money. It can be very profitable if things work out right.
Deal Fanatic
Dec 6, 2006
5805 posts
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Toronto
Not that I have any experience buying new build yet, but I prefer old (not too old) instead of the new builds.

I just don't like the layout of many new builds. e.g. all that oh look we have super high ceiling in every floor craziness.
For old house, you may spend some money on renovation (tho it's still not "required" to live in per say). For new build, no renovation but all that cost associated with simply waiting for the build to finish adds up pretty quickly.
Deal Fanatic
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Dec 27, 2009
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Victoria, BC
I'd prefer the 5 year old. I don't want to live in a muddy, noisy construction zone for the next few years, plus most of the newer places are tighter I find. Also, I want a fence already in place, landscaping, etc. I just prefer an already established neighbourhood.
Deal Fanatic
Dec 5, 2009
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Assuming we are comparing Apple to apples here. Some people will pay a premium for a new build. Because you get to customize it and choose your own finishes, and it's never been lived in and everything is brand new.

On the flip side, that "new" house is quickly an old house and the premium paid holds no value. Plus you need to wait for your house for year, plus live in a construction zone with mud and dust for a few years (more if you are unlucky), plus have the joy of dealing with Tarion and builder defects for at least a couple of years. Been there, done that. Never again.
Deal Fanatic
Dec 5, 2009
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Chickinvic wrote: I'd prefer the 5 year old. I don't want to live in a muddy, noisy construction zone for the next few years, plus most of the newer places are tighter I find. Also, I want a fence already in place, landscaping, etc. I just prefer an already established neighbourhood.
Oh fences. Forgot about that. What a freaking nightmare that can be.
Deal Addict
Apr 2, 2007
1423 posts
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Toronto
New builds come with tooooooooooooooooooooooooooooooooooooooooooooo many issues to deal with: Taxes, fees, builder markups, more municipal fees, more taxes, etc...
They ONLY reason you would buy new, would be the experience of being first IN, like buying a new car.

You can buy an older home and customize the surfaces to your choices and not what the builder confines your choices too... and you don't have to worry about delays on new builds and the endless dirt roads or a new build. Add to this, if you have deficiencies, the builder will have contractors going in/out of your home for a year... and deal with Tarion (..another joke)
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Dec 27, 2009
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Demon_Twinz wrote: you are also buying a home for future price usually 1-2 years from the deposit time. If the market goes up. you win
And if it goes down...
Deal Guru
May 1, 2012
10538 posts
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Toronto
Chickinvic wrote: And if it goes down...
Then you can walk away, in the worst case scenario you are out 30-60k.

If you insist on closing, you can still close. Although, mortgages may be a problem if markets drop too quickly.
Deal Fanatic
Dec 5, 2009
5768 posts
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Demon_Twinz wrote: you are also buying a home for future price usually 1-2 years from the deposit time. If the market goes up. you win
Don't see how this an advantage since if the market rises then the old house will as well. And you have somewhere to live for those 1-2 years. Unless you are speculating as an investment and putting deposits down to flip.
Deal Addict
Jan 31, 2016
1008 posts
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Prefer new builds as well for various reasons, but also because it keeps the wife happy. Fortunately the market in this area allows you to put down a small deposit and you have two houses increasing in value at the same time.

As for fences I build my own and prefer that, in addition if you buy a corner lot certain builders will do 1/3 of it and the gate.
Deal Fanatic
Dec 5, 2009
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Ketchenany wrote: Prefer new builds as well for various reasons, but also because it keeps the wife happy. Fortunately the market in this area allows you to put down a small deposit and you have two houses increasing in value at the same time.

As for fences I build my own and prefer that, in addition if you buy a corner lot certain builders will do 1/3 of it and the gate.
Problem with fences is not the building part, it's getting all the neighbours to agree on everything.
Deal Addict
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Jun 24, 2002
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BC
Buying an older home is always cheaper compared to a new home all things equal and that savings can be put in to renovations. Anything built from 2005 and up are pretty similar, especially layout wise, when it comes to townhouses in the lower mainland, just put the savings in to whatever renovations you want within reason.
Deal Addict
Jan 31, 2016
1008 posts
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fdl wrote: Problem with fences is not the building part, it's getting all the neighbours to agree on everything.
Very good point, I have heard horry stories. I have been fortunate, I usually offer to build them all if they pay for all the materials. Worked out so far.
Sr. Member
May 6, 2013
943 posts
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Toronto
We just bought a 1.5yr house and couldnt be happier. Super short close time and still all the goodness of a new build :)
Deal Guru
Jun 7, 2005
10358 posts
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Toronto
Some people only want brand new as they want to customize and pick everything they like. But then, you have to wait and lot of things to deal with when you move it, as basic as blinds/curtain, appliances, wall painting, etc. And for people who are upgrading, new built is probably not an option as you can't really predict the ACTUAL closing date and the market could change all the time. If it goes up, then you are fine. Imagine if the market drops significantly by the time you need to sell to close, that could be a disaster. To me, a decent 5 years old is pretty good as well unless you are really specific to pick every thing.

Regarding townhouse vs detached, if your budget allows, then of course you should pick a detached (not a condo, townhouse or semi).
Member
Mar 3, 2016
389 posts
250 upvotes
I prefer a resale 5-10 years old house than a brand new house for many reasons. You can rarely bargain with the builders (You can always negotiate with resellers, especially if there is no other offer on the table). Builders generally build the demand by selling only in phases so that supply is always low and they can keep their prices high. Even for upgrades, it will cost more than if you find a contractor yourself. And then there is this whole mess with dirt and big truck all around the neighborhood until the subdivision is completed. There is also the complication of building the fences and trying to reach an agreement with people you've never dealt before. Some of them might not even want to do the fences citing they have other priorities and you are left hanging.

After you take possession of the house, there is all kind of screw ups and you have to chase the builder to get those fixed. Also, many resale already have finished basement and any issue that was there when it was built has most likely been fixed by then. Plus appliances are already there so you don't have to go buy new appliances after paying a fortune for the house itself. With new built, you also have to deal with delays from the builders and the uncertainty of when you'll move in.

The neighborhood is already well developed with stores already there instead of the builders finishing all the houses before retail people wanting to open stores around. All these issues while you pay lower than new builds, I'll take that any day.
Deal Addict
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Jan 5, 2003
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fdl wrote: Don't see how this an advantage since if the market rises then the old house will as well. And you have somewhere to live for those 1-2 years. Unless you are speculating as an investment and putting deposits down to flip.
You don't sell the old house until your move in date is firm. In a rising market you make a killing as you sell at top dollar meanwhile the next phase or two is selling for hundreds of k more than what you paid.

Not saying that will always be the case but it has been for a while now.
Deal Addict
Apr 21, 2014
2321 posts
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Alberta
I always was a big fan of new builds (customization etc). However it seems like the price difference between new builds and resale is getting larger (take a look at the New Seaton thread). You could but a larger detached house near the lake in South Pickering on a 50 foot lot for the same price as a small detached on a 30 foot lot (or even a semi detached). I am leaning more towards resale, because you can definitely customize your home with the savings and have better quality materials and a fraction of the cost a new builder would charge you.

I wouldn't buy new anymore UNLESS it's in an up and coming area. For example buying in Kleinburg/Nashville/Nobleton in 2012-2014. Not many resales in those areas to choose from, and you will get appreciation as amenities are brought into those areas, 427 extension etc.

For Pickering, amenities are already there, and you are at the mercy of strictly the real estate market for housing appreciation.

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