Condo hunting: new versus resale
Enticed by those ads for a new condo development? Or are you looking for a resale condo in an existing building? If you're on a serious house hunt, it can be worth weighing the advantages of both new and resale condos, suggests Duncan Hill, manager of Sustainable Housing Policy and Research for the Canada Mortgage and Housing Corporation (CMHC). "If new and resale condos are available where you choose to live, look at both in order to choose a condo that best fits your needs and lifestyle." Here's his take on factors that may sway you one way or the other:
Five advantages of buying new: more than just choice
New condominiums, whether under construction or newly built, give you a fresh slate with respect to design and amenities.
"You have the advantage of new appliances and modern fixtures in your unit and new common elements, such as elevators, pool or gym," says Duncan Hill. The upside doesn't stop there, however:
- New building condition. "New buildings can have less wear and tear than older buildings," he says. "And the condo unit and common elements should be in good condition for years to come, meaning there may be less risk of expensive and disruptive repairs and renovations."
- Choice of units. "If you buy early, you have more choice of units in the building." You may even be able to choose what floor and direction your unit faces.
- Customized finishes. In addition to choosing finishes for countertops, cabinetry and even flooring, you can usually pay for upgrades on appliances or other fixtures.
- More efficient construction. New developments may be built to higher standards of energy efficiency, and also include recycling facilities. New construction is also subject to the most recent building codes.
Expert tip: Ask about special measures taken to protect your comfort levels. "Are there any special provisions to limit noise transmission between units? How are the units heated, cooled and ventilated? How are odours controlled?" All of these are factors to ask about so that you are better informed.
- New home warranty protection. To ensure that new dwellings are properly constructed, "many provinces have new home warranty programs," explains Mr.Hill. If anything covered goes wrong during the warranty period, the homeowner is protected.
Expert tip: If you do buy a new condo, take advantage of the GST Housing Rebate that allows you to recover some of the GST or federal portion of the HST you pay. Note that some developers include GST/HST in the listing price and others don't.
Five advantages of resale: no surprises, if you do your homework
Up for sale by the current owner, resale condos are usually available in older buildings and have already been occupied.
"What you see is what you get with resale condos," says our expert. "You can see exactly what you're paying for — the unit, common elements, amenities, location and neighbours." That can be a big comfort to some buyers. Other benefits:
- Established neighbourhood. "You already know what to expect from a neighbourhood and who your neighbours will be," says Mr. Hill. New condo buildings, on the other hand, may be in an up-and-coming neighbourhood that may change substantially in the next few years. "Speak with condo board members and owners in the building," he also advises, to get the feel of the condo community.
- Books to review. "You can also review the condo reserve fund and other documents to get a sense of whether or not the condo has sufficient funds to see to repairs and replacements," adds Mr. Hill. "That will help ensure that you don't get hit with an unexpected charge for repairs to common elements such as elevators, balconies, parking garages and roofing, for example."
- A firm moving date. Your closing agreement firmly determines when the place will be yours, unlike new developments, where move-in dates can be rescheduled.
- More predictable costs. You don't have to pay GST on a resale condo (unless the unit has been substantially renovated). You'll also have a firmer grasp of maintenance fees, current utility bills and property taxes.
- Spacious floor plans. In many cities, new condos are getting smaller and smaller. Older condominiums may offer larger units.
For more information on buying a new or older condo, download the CMHC's Condominium Buyers' Guide (pdf).
New condo? Get the right homeowners insurance
Smart condo-owners know they need a special homeowners insurance package. Even before you buy, you can still get a quote on your insurance premiums — that goes a long way when budgeting for your big move. Contact your insurance provider for all the details.
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