The desire to own something new is always there however in the Vancouver market (and all throughout Canada) there are often some great older homes and condos that are renovated with lots of character. The debate on purchasing New vs Old is often a discussion with Clients, so let’s go over some of the major differences.
Condo Design and Layout:
Older condos have larger layouts than new units being built today; bedrooms accommodate more than a bed and dresser, yet older kitchen designs are often smaller and separated from the living area. Older layouts may require renovation or updates to modernize to today’s more open concept designs. You may also find that the balconies are slightly larger in an older unit.
The choice for character or modern exterior will of course be up to personal preference. The interiors of condos including common areas, lobbies and hallways may be more easily updated to more modern styles.
Newer condos have open concept layouts. The overall square footage is typically less leading to smaller bedrooms and living areas. Micro condos are becoming more popular as Greater Vancouver land is at a premium and smaller units can be offered at affordable price points.
When looking at new condo floor plans and show suites, it is harder to visualize the final size. There can be differences between the show suite and the final product. Measurements of rooms are provided so measure a room or two in your current home to get a good idea of the space you are buying into.
With older condos, you see exactly what you are buying. The room size, appliances, finishing etc. When looking at new condos you may have to be specific in your contract on things such as finishing, floors, appliances etc.
There are also redevelopments of older buildings or warehouses that have been redone to loft style, open concept units that have both character and the modern looks combined.
Location, Amenities and Lifestyle:
Being Vancouverites, much emphasis is on lifestyle, location and services. There is much to consider here beyond price alone, after all, you are buying a home! You have to ensure that this new potential home will suit your desired quality of life.
Parking and Storage Lockers: Older condo buildings will often offer more and/or larger spaces. Many folks are opting to go vehicle free though be aware that lack of such spaces could affect resale value in the future.
Common Areas are more plentiful in some older buildings from pools, hot tubs, fitness rooms to party rooms. Some new buildings have an added guest suite for out of town guests.
Non Smoking buildings are more common. Consider this as balconies are in close proximity to each desire to keep a window or sliding door open in warmer months.
Location and Amenities should factor largely in your decision. Do you desire to be close to a city centre, Sea Wall or harbour? Can you quickly get to the grocery store or transit stop? Look into the nature or culture of the area: senior, younger, quiet, bustling looking to live near others of similar lifestyle?
Costs; Price, Taxes, Strata Fees and Strata Funding:
Before shopping contact a Mortgage Broker to assess you financial situation. Property Taxes and Strata Fees are going to be monthly obligations, so you want to ensure that the combination of monthly costs is in your budget. At Dominion Lending Centres, we can help you better understand all of these obligations.
Newer condo developments may come with a property tax assistance or incentive programs and may even have lower Strata Fees on start up. Remember that these are temporary. Strata Fees will increase to build contingency funds for future.
Sales tax (GST) is charged on new properties not previously owned. This can equate to a substantial difference in your closing costs, so be sure to understand if the GST is included or excluded from your purchase price. Older or previously owned condos are exempt from the GST which could save thousands of dollars.
A major consideration in older condominiums is the health of the Strata Funds. There are costs to maintain a building over time. Review the Strata financials and the Depreciation Reports as these offer great indicators to the overall health of the Strata and the current state of the building and common areas. An underfunded Strata can be an indicator of future assessments or large repair fees.
Warranties will also be of interest on both types of condos from New Home and Builders warranties applied to new condos or warranties on new items and equipment installed to older condos.
Buildings under construction can experience delays. Be aware that if delays occur you may have to cover other costs in the meantime such as rent or storage etc. Purchasing an existing condo allows you the comfort of knowing the set dates for completion and possession.
If you are looking at an investment condo, similar considerations apply. Investors should look for unit that is both desirable to good tenants and a sound business or investment decision. Employment, current market rents and what type of tenant one would like to attract are just a few things to look at. An investor would want to ensure a sharp price or pick up a bargain property in a developing area and ensure that operating costs are adequately covered.
Until next time!