New vs. Pre-Owned Property

View the New vs. Pre-Owned Comparison Chart for a better understanding of the differences between new properties and pre-owned properties.

New vs. Pre-Owned Comparison Chart
  New Properties Pre-Owned Properties
Mortgage Developers often appoint loan lenders to offer mortgage loan with lower interest rates, favorable repayment terms and simple application process. Sometimes developers may provide Second Legal Charge, so homebuyers are only required to pay 10% of the property’s price for down payment. Loan lenders are stricter on appraisals on pre-owned homes and mortgage application process is usually longer and more complicated.
Purchase price Price per square foot is relatively high. For the same money you can get a bigger pre-owned home. Prices are less negotiable. The developer can't give you a deal because that would undercut appraisals on other homes in the development. Prices are set lower than those of new properties of similar size and are more negotiable.
Supply According to current Procedure for Land Sale under the Application System, land supply is restricted, so new property supply is limited. Pre-owned properties are superabundant in the property market. Homebuyers have a broad range of choice.
Availability Uncompleted developments with consent to sell do not allow on-site home inspection. The model home that you see is not what you get. Homebuyers should carefully study details of the developments through public advertisement, sales brochure and price lists released by the developer. The sales brochure contains the main points of the Deed of Mutual Covenant, including the definition of common areas, terms of appointment of manager, the basis of calculating management fees, amounts of any deposits and other relevant details. Past sales history is not available. Often price lists are even not released when developers hold sales of units by private sale direct with purchasers under the Consent Scheme. On-site home inspection and Fung Shui inspection can be carried out. Past sales history and other relevant information can be obtained from the Land Registry and for your reference and determination of the offer price too.
Maintenance New construction can usually last for a while, so new homeowners are not likely to care for maintenance. Things tend to go wrong after a period of time. For older homes, it often involves expensive replacement of wiring and plumbing.
Layout Most of them come with a more open layout and higher ceiling, lighter and brighter. There are usually sufficient wall and floor outlets to accommodate all the high tech goodies. Most of them feature master suite baths. There are some usually not enough bathrooms and electrical outlets. Some of them need pricey kitchen and bathroom remodels.
Provision Standard items e.g. built-in kitchen cupboard, refrigerators, microwaves, air-conditioners and washing machine are claimed to be “extras” in the price. Usually, provision of furniture and appliances from home sellers is added on top of the price.
Energy Efficiency New appliances and wiring use less energy. Older appliances and wiring are less energy saving.
Facilities Extensive and versatile recreational facilities are usually the selling point; however, they will bring you costly operating fees. Developments without a large scale of facilities occupy less common area. Homes are larger in size.
Management Stricter management secures a safer home; however, it also means a higher monthly fee. Looser management does not necessarily result in an unsafe home. Instead, it saves you money from the management bills.
Warranty Developers are required to provide a certain period of warranty. Home sellers usually do not provide warranty.
Neighborhoods Networks of schools, transportation and amenities may take time to build up. Schools, transportation, shopping and entertainment are well established and networked.
History Owning a home that is brand new makes you feel a sense of belonging. It also frees your mind from the past history e.g. accidents, homicide and suicide of your home. Homebuyers should trace the past history of pre-owned homes from different channels e.g. home sellers, property agents, housing management office, bank, websites, and news. Incidents of accidents, homicide or suicide within homes will adversely affect mortgage loan application and re-sale value.
Should You Buy New or Pre-Owned?
New homes cost more than pre-owned homes of the same size. Pre-owned homes cost less but usually need some repair. The size of new homes has shrunk as the land costs increase. Pre-owned homes seem more spacious. New homes are better facilitated, but they also charge you more operating fees. Advantages perceived by somebody could be shortcomings from your point of view.
Thus, it is advisable for you to list out the parameters and criteria of your dream home before shopping.