Old and new apartments compared: Which one is the better buy?

There’s no right or wrong answer when it comes to choosing between old and new apartments. Some buyers may be steered towards an older apartment by their budget, while others may be looking for the kind of communal amenities most commonly found in new developments.

These are some of the pros and cons of both so you can go apartment shopping armed with more knowledge.

Why should I buy a new apartment?

1. New apartments are popular with tenants

Given a choice between an older-style unit and a new unit at the same price point, a new unit will often generate more interest on the rental market.

Nelson Alexander Kew agent Chris Ewart says in his experience renters are often drawn to new developments because they like the idea of a new kitchen and bathroom. There’s something intrinsically appealing about sparkling new appliances and tiles without a hint of mould.

2. A new apartment should mean lower maintenance

“A new apartment comes with a brand new fitout and is ready to move into,” says Mark Foy, principal of Belle Property Surry Hills. “In theory, you won’t have to do anything for 10 to 15 years.”

Ewart says investors and downsizers will often buy new over old for this very reason – a perception that there will be less maintenance.

“If someone has an older parent moving from a house into an apartment they generally prefer new because they’re not looking for a renovation project,” he said. “They’re looking for ease of living, something to move into and enjoy straight away.”

3. New apartment developments often include pools and gyms

It’s not unusual for new apartment developments in big cities to include communal facilities once only the domain of holiday resorts.

“More often than not the developer includes features like gyms, pools, maybe a retail component with a café, or a rooftop bar or pool,” says Simon Pressley, managing director of buyer’s agency and property advisory firm Propertyology. “These are great for tenants or owner-occupiers looking for these facilities, but remember that ultimately this will translate to higher body corporate fees.”

4. New apartments generally include outdoor space and parking

With Australians keen to embrace any opportunity to get outdoors, developers know secure parking, and a balcony or courtyard can be essential for many home buyers, so most new apartments come with both of these features as standard. Ground floor apartments may include a courtyard, with upper levels sometimes offering more than one balcony.

5. New apartments come with higher depreciation benefits

New apartments are more attractive to investors because of the ability to offset the costs of holding a property with tax depreciation benefits. Depending on which state the property is in, there may also be stamp duty savings or first-home owner grants offered for new apartments.

Why should I buy an older apartment?

1. Older apartments are often cheaper

With art deco apartments possibly the exception, older apartments are generally more affordable than newly built or off-the-plan apartments.

Pressley points out that developers pass on all the taxes associated with new builds to the buyer, which can equate to a 30 per cent premium over comparable established properties.

“There have been lots of stories about off-the-plan apartments settling for less than the contract price,” he says. “While part of that is a reflection of the property market, you’ll find established properties would not have fallen by anywhere near the same amount as new properties.”

Older apartments also tend to have lower owner’s corporation fees, particularly if there are no lifts or community facilities to pay for.

2. Older apartments are often bigger

Our experts agree that in many cases, older apartments have a more generous floor plan than those built in recent years.

“If you buy an art deco apartment or anything built in the 1980s they do tend to be larger than new apartments going up today,” says Foy.

According to figures produced by buyer’s agency Secret Agent, one-bedroom art deco apartments in Melbourne are on average 20 per cent larger than other apartment types.

3. Character apartments have shown enduring appeal

“Period properties sell better,” says Foy. “[Compared to a contemporary property] a period property will sell faster and for a better price.”

Ewart agrees. “Art deco apartments are always popular,” he says. “Whenever I’ve got an art deco one coming up I know it’s going to go like a rocket.”

With character properties making up a shrinking percentage of the property pool, it stands to reason there will be even more demand than supply going forward.

4. You can add value to an older apartment

Many investors choose to buy property where there is a clear path to quick capital gains and when it comes to apartments, the best way to add value is via a renovation.

“A new property will have mod cons and modern styling with tiles and paint that meet a 2019 taste palette,” says Pressley. “But these are just cosmetic things, and while it’s a bit of an effort, it doesn’t have to cost too much to update an older apartment.”

Pressley says an interior paint job or new tiles to replace a lino floor will add instant equity for a small outlay, and a new kitchen and bathroom, while more expensive, provides an even better opportunity to add value.

5. Older apartments are often in boutique blocks

“I think one advantage with older units is that they were usually very well built and in smaller blocks,” says Ewart.

Pressley says many older apartment blocks had only six or 10 units and were built to stand the test of time.

Some savvy buyers are amalgamating older apartments to create luxury dwellings, Pressley said. “I’ve heard of people buying a six-pack and knocking out the internal walls to create two big apartments.”