Newer v/s older houses

Hi guys, starting this thread to understand your point of view on years old popular facts

• That land value appreciates and building depreciates.
• On selling, higher land value gets better price even if building is older.
• Paying for new bling is wastage of money

All of us investors believe in above and hence while buying understands the value of higher land content.
I am in market to sell my house in Moreton Bay Region. The house was fully carpeted couple of months back. It was fully painted around 3 years back. It is only 600 m from train station and around same distance from shopping centre and Woolworths. It is a leafy suburb with cul de sac road.

But my selling agent is trying to convince me that even after all these positives and large land area, buyers are paying more for newer houses, even if far from train station and smaller land component. Even I can observe somewhat this trend that newer houses on 70% land component and 3 kms from station are sold for better dollar value.

I am unable to understand that what is the use of buying older bread and butter properties if ultimately we wont be able to sell them for better price even when they are located well and have bigger land component. Any views on this please, thanks!

 

Exactly, but then while selling shouldnt these well located houses with higher land component should sell at better price than shiny new houses far from station and smaller land.

 

The forth point that nobody mentions is that owner occupier properties dont need to conform with rationale or financial reasoning.

I know plenty of people who prefer (and built) a new build in outer areas on smaller sites as that's what they wanted... and to be fair new builds are usually more functional.
There is nothing great about older houses other than an element of character if it's old enough.

Well located is a relative term to each individual, and I have to ask what the point is of a bigger block of land if you cant do anything with it but mow the lawn. 600m to the shops/station is only any good if you need it.

I would say there is some truth to the old assumptions you list, but it's not as significant as you might have thought.

 

Newer houses would have cost more to build in the first place, or involved significant renovation costs.

If you had bought a newer house, you might sell it for more, but it would have cost you more too. Profit = Selling price less purchase price. You cant just focus on selling price.

In the longer term, the larger land is more likely to have redevelopment value. But it takes time to get there.

 

Thanks @MB18 , understand where you are coming from. I am thinking now selling older houses only makes sense if you subdivide the bigger block, build a new one and renovate the older one. Selling a property as such wont fetch you good money

 

Thanks @Y-man, didnt mean exactly crappy but not shiny new

 

Thanks mate and sorry for my delayed response.
Wish while buying, we could get deals like this where old house is around 70% of newer shiny house.

 

Where exactly in Moreton Bay?

A long long time ago when we sold our old but renovated house in Lawnton a few hundred metres from the train station, it was suddenly devalued a few months before we were ready to sell.

Why? Because a brand new cheap estate full of tiny new houses, badly built, on tiny little blocks of land on the flood plain, were desirable to young gullible FHBs who saw "new" but didn't know anything at all about elevated land that caught all the bay breezes and could never ever flood.

 

I think you're getting confused about a general rule applying in what is probably a very specific market you're operating in.

I think the general rule is still good, especially if you make the more apt comparison to if you bought something newer with a smaller land component back then.

 

I have seen older houses meticulously taken care of by the ex-owners including an award-winning garden only to be bulldozed on the day the conveyancing was done. I once almost cried because it was something I would have love to own. I often find stacked up rectangular blocks called modern homes lack character. But then I am from the last century...

 

Perhaps the salesman is prepping you to accept a lower value so they can get a quick sale or access it for themselves. The special redevelopment zones to fast-track development within 800m of shopping centres is all about redevelopment, not to attract OOs.

 

Thanks @Angel , mine is in Kallangur.
Exactly this is my point, while buying I didnt observe so much difference between newer and older house but while selling these newer house not located well and have lesser land component are sold at much higher price

 

If they are similar priced while buying and selling both, then why spend unnecessarily on maintenance of older houses

 

Thanks @thatbum while buying my next , I will have a look at the price of newer stock. As of now, I have always avoided even looking at the prices of newer stock

 

Yes, might be the case but then I am not able to see similar stock on RealEstate as well so cant compare the prices... most of the stock available is newer houses