When to buy: Old versus new

In the September issue of NZ Property Investor magazine, our journalist investigates when buying new is a better option.

Some investors would rather eat cockroaches than buy new properties. But the Reserve Bank’s new LVR restrictions could mean big business for home builders.

The new LVRs mean most investors wanting to buy second-hand properties will have to stomp up a whopping 40% deposit on all but new properties.

Does this mean it is worth buying new? Or should investors simply wait for the cycle to turn?

Grace any large gathering of property investors and most will argue until the cows come home that second-hand properties make more sense yield-wise.

Tellingly, however, Keith Hay Homes, which targets the investor sector says its business in Auckland jumped from 30% investors to nearly 70% after the Reserve Bank’s last LVR increase for investors.

If ever there was a case where apples look like kiwifruit, it’s the new versus old question.

Whether it’s rents, yields, capital gain or even purchasing costs, an awful lot of ifs and buts have to be entered into the spreadsheet.

Our journalist delves into all the details of buying old versus buying new in her article.

To read the full story click here to get the digital issue of NZ Property Investor magazine.

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