Once you make a decision that you want to buy a property you need to decide: do you want it to be a new development or would you prefer to buy it second-hand?
Both options have their advantages and disadvantages. Read below in order to make an informed decision.
Based on the research done by TNS Polska in April 2015 there are three most important reasons why people choose for new developments:
- as said it is a new development, which translates into: doesn’t require renovation. It’s especially important to those who have limited budget.
- everything is new. By that we mean not only the building itself; it’s all the installations, windows, doors.
- you get to decorate it yourself
But when you think about it there is a lot more:
- modern infrastructure (a lift in the building, monitoring etc.)
- lower costs of maintenance (rent and other admin costs)
- lower costs of transaction (read more: additional costs when buying a property)
- you can easily purchase a property from primary market without help of a real estate agent which means you don’t pay their commission
- possibility of getting a parking space
Of course, this option has its disadvantages, too:
- you need to wait longer for the flat / house – you might be getting a property that is already finished but mind you, it is popular in Poland to buy a property before hasn’t been actually built. In such case you might wait months (years?) before you can move in to your new property
- uncertainty due to the possibility of the developer going bankrupt. Yes, there has been cases of that in Krakow, as well. The building is in a basic state, the developer lets people buy the flats and then.. they disappear living clients with huge debts and without their flats
- additional costs of decorating your new flat or house – in most instances you need everything new. For sure the kitchen furniture and bathroom equipment
- no chance of moving in directly after buying the property – even if you get a place that’s technically finished, you still need to decorate it
- bad technical condition of the new building – they say the old buildings were built for centuries, the current ones have got expiry date…
- localisation: it’s easier to find a super nice place outside of the city centre, but if the Old Town area is your choice then you should really consider the secondary market due to… prices. New developments in the centre are insanely expensive
Let’s start with pros, shall we?
- according to the TNS Polska research the biggest advantage is the possibility of negotiating the price. It’s actually true – developers have limits when it comes to negotiation, property owners don’t. They sometimes need that money really quickly so who knows, maybe they will be willing to go down on price quite a lot?
- no need to decorate the flat – if anything you might have to refresh it a bit, but in most cases the previous owners will leave all kitchen and bathroom equipment, sometimes, if agreed, even their furniture and AGD
- it’s a quick transaction – it’s a standard that you should get the keys to your new property within 2 weeks from signing the final contract but often the times you might actually move in the very same day!
- localisation: you can buy a flat or a house where new developments simply don’t exist. Take the Old Town in Krakow – it’s full of kamienica’s!
- the transaction is safer – not only will there be no delays in its realisation. You know what you’re buying (the building is finished) and you don’t have to worry that someone will run away with your money leaving you with nothing!
Unfortunately, not everything is ideal.
- of course you can buy an old and very well kept property. But let’s not kid ourselves, it will need a renovation a lot quicker than a new development
- buying a property from secondary market also means additional costs like CCP tax or real estate agent’s commission – read here to find out more about how much you should budget on the extra costs
- old buildings were built without all of the modern technologies. They have no lift or other facilities (unless, of course, the property was modernised)
According to “Nowy Adres” Sp. z o.o. more and more people are inclined to buy a property from secondary market. Currently it’s about 74% of all the buyers (mind you, this statistics concern the whole country, not only Krakow) and only 24% are absolutely sure they want a new development. It’s quite surprising considering the results from about 15 years ago – 50% clients were into second-hand buildings and 30% wanted brand new properties.
What’s the reason for such high score for secondary market? We might only guess but it seems that in the past few years we observe a new phenomenon: “almost new” second hand properties. They are already considered a secondary market due to form of ownership but also price, but at the same time they’re “young” enough to still look quite new and remind us of primary market. These properties were often bought by someone and never lived in or simply bought for investment. You can even get one with a tenant living there already 🙂
Hope that this post made it easier for you to decide which option sound better!