Buying a new build or second-hand?16th November 2023
New-build homes cost on average 17% more than second-hand homes but are more energy efficient.
The second-hand market offers more choice, tends to be more centrally located but improvements are required.
So is it better to buy a new-build or a second-hand home?
There is no single answer as both options have their advantages and disadvantages. The final decision depends on the buyer's preferences and needs.
What are the advantages of a new-build home?
More efficient and better lit room layouts. New-build homes often have larger windows, wider terraces and balconies and are better equipped in terms of home automation than second-hand homes. New builds often have more communal areas such as swimming pools, gardens, playgrounds, gyms, saunas and open spaces.
If a new-build home is bought off-plan, in some cases it is possible to make changes to the finishes or even the layout of the home.
Greater energy efficiency and consumption savings. New-build homes are more energy efficient than second-hand homes, especially compared to older buildings. This helps to optimise consumption and thus save on energy bills.
The Technical Building Code (CTE), which combines building and efficiency rules, states that all new buildings must ensure "rational use of energy". This document requires homes to have thermal insulation to regulate temperature, low-consumption lighting and that part of the energy consumption comes from renewable sources (produced in the same building or outside). This efficiency level is recorded on the energy label, a compulsory element for every home sold or rented out.
Because the property is newly built, the buyer does not have to carry out any major renovations, either in the home or in the building, so the likelihood of having to pay community fees is much lower than for a second-hand home. During the first 10 years, most of the common costs will be ordinary: lift, common electricity and water, cleaning and caretaker.
Newly built homes have better quality guarantees. The "Ley de Ordenación de la Edificación" (LOE) ensures that all new buildings are covered for one year for damage or defects in the workmanship of the work, three years for defects affecting the habitability of the occupants and 10 years for defects in the structure of the building.
Higher price. The price of a new-build home is usually higher than that of a second-hand one, and it is usually non-negotiable. According to the Ministry of Transport, Mobility and Urban Agenda (MITMA), in the third quarter of 2021 in Spain, the square metres of houses less than five years old (statistically considered new-builds) were on average 17% more expensive than those of older homes.
The down payment is not immediate. If you buy a property outside construction plans, you have to wait until it is built before you can move in, which often entails double costs for the buyer. On one hand, they have to pay the instalments for the new home and on the other, they have to pay for the home they are living in.
Second-hand home: better price, but usually requires renovation work.
Lower price. Second-hand homes are usually cheaper, as MITMA data shows, and they are getting more expensive more slowly than new-build homes. According to the National Institute of Statistics (INE), in the second quarter of 2021, the price of new-build homes rose 6% compared to 2.9% for second-hand homes.
More central location. One of the attractions of second-hand homes is that they are often the only option if you are looking for a property in central areas with good connections and public services. New construction is rather often on the outskirts of cities, in recently urbanised areas where public services are still slow to take off.
Decision: The final decision on whether to go for a new-build or second-hand depends on your own preferences and needs.
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