Buying a new versus secondhand home in South Africa

The choice between investing in a new development or a secondhand home will depend on the buyer’s preference for convenience and security, or space and flexibility.

Real Estate Services CEO Giovanni Gaggia said this is one of the biggest decisions buyers face when buying property.

He outlined the benefits and drawbacks of both options, explaining that the choice will ultimately depend on the specific buyers’ priorities.

For example, one of the standout advantages of buying in a new development is that the property is brand new. This is often accompanied by developer guarantees and warranty coverage, offering peace of mind.

“New developments typically feature modern, energy-efficient designs built to the latest standards,” Gaggia said. 

“They come with developer guarantees that protect your investment and reduce unexpected repair costs.”

Another significant benefit is security. New developments are usually designed with safety as a priority, with features like access-controlled gates, CCTV, electric fencing, and often 24-hour security patrols.

“In most cases, these security features are already included in your monthly levies. That means buyers don’t have to factor in additional costs for private security,” Gaggia explained.

Lifestyle amenities are another selling point. Many new estates offer communal extras like swimming pools, gyms, clubhouses, and kids’ play parks.

“For buyers looking for lifestyle and convenience, these developments offer an all-in-one package,” he said.

However, some compelling reasons exist to consider the secondhand property market. For example, older homes tend to offer more space, including larger gardens, bigger rooms, and often more character.

“This can be a major drawcard for buyers who prioritise space and privacy,” Gaggia explained.

Another potential advantage is cost, as secondhand buyers may avoid the levies and homeowners’ association fees that often come with sectional title or estate living in new developments.

“While some developments offer amazing value, the fees can be restrictive or costly in the long term. It’s important to weigh that up,” Gaggia said.

Buying versus renting

Another important decision South Africans looking for a home need to consider is buying versus renting.

Here, Gaggia’s advice remains the same – it will depend on the specific buyers’ preferences and priorities, as well as how it fits into their lifestyles.

“With rising interest rates, load-shedding, and increasing municipal rates, the decision requires careful thought,” he said.

“The right choice depends on your unique financial circumstances and long-term objectives.”

However, he explained that there are some factors every buyer, whether renting or buying, should consider.

For example, interest rates can heavily influence the affordability of buying a home. “Higher interest rates increase monthly repayments, which can place a strain on your budget,” Gaggia notes. 

“Still, if you can manage those payments, buying may be more cost-effective over time than renting.”

He highlighted municipal rates as another key concern, as they can significantly affect the cost of owning a home.

Gaggia also offered five practical tips to help South Africans make an informed decision:

1. Assess Your Finances

Before committing to buying or renting, examine your income, expenses, and overall financial stability.

“Can you afford the deposit and monthly bond repayments if you buy? Or would renting be more manageable given potential interest rate hikes and increasing municipal costs?” Gaggia said.

2. Consider Your Lifestyle

Gaggia advised South Africans to think about their current situation and future plans, and how this would fit into their choice of property.

“Are you seeking a long-term home or a short-term base? Do you want the freedom to renovate or the flexibility to move without hassle?” he asked.

3. Research the Market

Gaggia stressed the importance of understanding the property market in the area you’re considering.

“Look into property values, rental trends, demand levels, and projected growth. Knowledge is power when it comes to real estate decisions,” he said.

4. Seek Expert Advice

Partnering with a trusted real estate professional can provide valuable insights that could assist buyers in making the right choice.

“An experienced agent can offer guidance tailored to your circumstances and help you avoid costly mistakes,” Gaggia said.

5. Plan for the Long-Term

Gaggia said it is important to have a long-term strategy, whether you rent or buy. For example, consider how fluctuating interest rates and rising municipal tariffs could impact your finances in five to ten years.