brand new vs few years old - price

hi,

just wondering what your thoughts are regarding when a house can achieve its highest price;
obviously everyone wants a brand new house and that will definitely fetch a bit more premium.

question is how much more VS a house that is a few years old. i know its hard to be 100% spot on with figures, but would appreciate a general rule of thumb/ based on experience knowledge

assume the following hypothetical scenario:
1. Brand new house (used hard wearing materials) - lets say worth 650k today
2. No capital growth for 4-5 years
3. rented out for 4-5 years. but have minimal wear and tear at the end right before selling (maybe even fresh coat of paint if needed)

using the above scenario, how much less can i get if i sell in future compared to if i sell it now?

thanks.

 

thanks for replying wylie,

what cg % are they assuming when they say it takes 5 years to recuperate the lost "premium" of brand new?

 

Real life example just to back up what Wylie said.

I bought a townhouse in Coorparoo in August 2014 for $565k.

It was built in 2009 and sold for $585k then

 

Thats quite a significant premium reduction just by renting it out.

Not familiar with coorparoo, but had a quick look at annual growth, seems like median is higher in 2014 than in 2009.

 

This would purely depend on the suburb and state of the market. It's difficult to make this comparison unless the market has been flat whilst the property has been rented out.

 

I haven't seen to be the case in Sydney.
Is it because the "new" premium is based on marketing to overseas buyers who can only buy new?

 

New houses should attain more price but at the same time will lose the value once moved in as it is no longer new.

Houses depreciate just like cars as new material, better build quality and better technology and more affordable technology come out each year.

Go back 10-20 years ago, to have an automatic roller door was the best thing since slice bread now if it isn't an automatic roller door (or gate) it is a negative.

Same thing with dishwashers and air con, 10-20 years ago it was classified as a luxury, now you wouldn't dream of not putting one in.

It is also rare you see a brick house not rendered these days again it is almost expected to be rendered.

 

If you sell after the 5 year mark, doesn't the lack of GST help but also on the other hand, the buyer doesn't get the FHBG incentive. A lot of tax factors and depreciation in the equation too.

 

Agreed. I think this is too hard a question to generalise on.

Btw, not all new houses are rendered. Plenty look great without render...

 

Doesnt make a difference in my area one the highest prices i have seen for a "new" build was lived in just under a year before sale. But new builds are few and far between around here.

 

@neK In a hot market, new will be the first preference of most buyers and many do not notice there are no window furnishings or tv aerials until they move in.

 

Didn't say they don't exist but if that is what you think okay also didn't say anything about houses looking bad without render (my house isn't).

I was talking about how houses have improved and why a new house would attain a higher price until moved in as it becomes second hand along with the deprecation due to many factors some included in my post.

 

Im unsure if the premium of new house immediately drops, just by having someone move in even half a year only. I mean almost everything would still look new, only thing that changed is someone [has used the] toilet or [the] kitchen bench.... I get that if stuff becomes dated it won't be a good as newer stuff.

 

Six months of wear and tear compared to new never lived in, I would rather have new than the slightly used one for the same price, you can have the slightly older one if you want.

However as most people would want the new property it attracts a higher price (supply vs demand).

Same as a car 6 months only done 1,000km (hardly used) still attracts less price then then the same plated car that is new.