When selecting a home, there are countless questions that prospective buyers will have to answer. Where do I want to live? How much can I afford to spend? Would I prefer a brand-new unit – or something that already has a bit of history?
When it comes to a condominium unit’s age, it really comes down to the buyer’s preferences. There are pros and cons to each, and we will highlight the top ones for each category below.
New condos – pros
It’s not often that you’ll encounter an ordinary brown rectangular condominium building under 5 years old. Developers want people to say “wow” when they see new builds. New condos are modern and aesthetically pleasing. The buildings might have smooth curves, intricate geometrical patterns, or decadent accents that tempt those passing by to see what’s inside.
New condos promise a lifestyle along with a great place to live. They often reflect the builder’s creativity and values, and aim to stand out from the rest of the market.
Speaking of lifestyle, newer buildings often (but not always) cater to younger owners. In many cases, these are first-time buyers who don’t yet have enough wealth to purchase a single-family home, or who prefer to be closer to urban attractions.
The rules and standards in these buildings serve their needs and wants. For example, owners may be prohibited from smoking in their units and on their balconies.
The retail stores below new buildings have evolved from dentist offices and variety stores to entire grocery stores and pharmacies. New condos tend to be very close to transit stops, office buildings, restaurants, and more.
Developers take note of what buyers are looking for, and as a result, condo amenities change. For example, indoor pools used to be a big sell, but new condos have features like guest suites that can be rented out for a night, parcel lockers to keep deliveries safe, and fitness centers with plenty of equipment.
Buyers who purchase units pre-construction will pay less upfront for their unit than someone who is buying a place that already exists. The trade-off is they don’t know exactly what the final product will look like.
Newer condo developments may also come with property tax assistance or incentive programs, as well as lower condo fees on start-up. But keep in mind that these discounts and rates are temporary. Fees will go up over time.
Higher appreciation rate
Buildings less than 5 years old will have an appreciation rate of roughly 8-10% depending on the location and market conditions. Older buildings may appreciate at around half that rate.
New condos – cons
Lack of space
Newer condos have open-concept layouts. But that’s often to make it look like there is more space available. Condo units are getting smaller even though sale prices have increased. Some buildings even offer micro condos which leave owners little room to do much of anything in their homes. 2- or 3-bedroom floor plans are squeezed into 700 square feet.
While this is not true of most buildings, there are cases where smaller details are overlooked by developers who are ready to move on to the next building. Construction is rushed, especially if a project has fallen behind schedule, and quality is compromised. As a result, owners may end up with crooked cabinets, malfunctioning lights, sub-par appliances, windows that aren’t sealed properly, etc.
There may be a wait to move in
Condo buildings under construction can, and often do experience delays. Be prepared to wait beyond the original completion date.
People may have purchased units solely as investment properties
Pre-construction condos are attractive to those who plan to use their unit as an investment property. They can buy for a better price, and charge more in rent as the value of the property increases. With more renters coming and going, it can be difficult to establish a sense of community.
Old condos – pros
The biggest pro by far to purchasing an older condo is the larger layouts. Old units have bedrooms with space for more than a bed and a dresser, and a separate kitchen and dining room. There is enough space to store things, and to entertain guests. Balconies may also be slightly larger in an older unit.
More practical perks
While older condominiums probably haven’t dedicated units for guest rentals, they might include parking and storage lockers in the purchasing price. The parking garages probably have more space, too. Owners may also have access to one or two really nice amenities, such as a hot tub or library.
Easier to customize
Though older units aren’t always as modern, it’s generally easier to renovate kitchens and bathrooms in an older condominium. That’s not only because of the space, but also the condo rules regarding renovations. By completing upgrades, the unit will also sell for more.
Stronger sense of community
Condo owners appreciate how much space older buildings offer them, and they are so comfortable that they may end up living in the same space for decades. There are generally fewer renters in old buildings, which means neighbours actually know one another and the staff who work for the building.
Old condos – cons
Depending on how old the building is, the style of the condo as well as the facilities may feel a bit stale. Be warned, your unit may not have a dishwasher or ensuite laundry. Condos can pay for upgrades and makeovers, but this is not always something that owners want to invest in.
More costly repairs
Time takes a toll on busy condo buildings. After many years, carpets, flooring, elevator parts, etc., need to be repaired or replaced. Major repairs may be required more frequently, and it’s up to the owners to pay for those repairs, either through monthly condo fees or special assessments.
Prospective buyers must analyze the financial health of older condos and get facts about things like when the roof was last repaired, when was the elevator last replaced, and how much money is in the reserve fund. An underfunded condominium can be an indicator of future assessments or big increases in fees.
The 2021 Surfside condo collapse created deep feelings of fear and concern for virtually every owner that lived in an older building. The condo caved, starting at the ground-floor parking area and pool deck, due to many critical problems including design failures, shoddy construction, and neglect.
As long as proper maintenance is carried out, owners should not be concerned about the safety of their buildings. Furthermore, many states have introduced legislation that will ensure older buildings receive the care and maintenance they need.
Old and new condominium buildings both have perks and drawbacks. If you are someone who is wanting to settle down for a long time, prefers a stronger sense of community, and appreciates space over amenities, then an older building may be better suited to your needs. However, if being the first person to live in a condo unit excites you, if you value amenities more than space, and if you like to be near urban attractions, then a new building is the way to go.
Leave a Reply