Buying a Pre-Owned Condo vs. a New Build

When buying a condo, one of the critical questions you will face is whether to look into a pre-owned condo or one in a new build. While this may seem insignificant at first glance, there are quite a few distinct differences that can significantly influence your decision. In a way, it's similar to looking into buying a car or, on a much smaller scale, a book, essentially the same product but with very different premises.

Today, we'll look at both options and their benefits and drawbacks, such as cost, location and amenities, to ensure you get the most for your money.

Understanding Pre-Owned Condos

As the name suggests, pre-owned condos are also known as resale condos, meaning they've had previous owners. They come in all varieties and can dramatically vary in style, age and condition, depending on when they were built. They often are located in well-established neighbourhoods and already have a sense of community and stability.

Typical Age and Condition

Their ages can range anywhere from a few years to several decades old, and their condition strongly depends on how well the previous owners have maintained them. This point makes it critical to do a thorough property inspection before entering any contracts to see if any potential issues, such as outdated electrical wiring or wear and tear, need to be fixed.

Common Features and Amenities

Older condos and condo buildings often have more unique architectural features and layouts than newer properties, as, in many cases, they were not as maximized for space use as new builds. Amenities can vary, from swimming pools and fitness centres to common areas, though they might not be as modern as those in new builds.

Understanding New Build Condos

On the other hand, new-build condos are new, freshly constructed and have never been lived in. Generally, they utilize the latest in design and construction standards and give you a modern and contemporary living experience that older condos may lack.

Overview of the Construction Process

The selling process for condos in new builds often begins before the construction is complete, which is called purchasing off-plan, and can take several months or even years before the building complex is completed. So, if you want to customize your unit, this could be a great opportunity to make some personalized changes without having to resort to renovations.

Common Features and Amenities

While many new builds still have the same amenities as the old ones, they are often more geared toward contemporary lifestyles. This includes smart home technologies, energy-efficient systems, and communal spaces designed for social interaction. In many cases, the aesthetic appeal of a new build is also used as a selling point.

Cost Comparison

Initial Purchase Price
As you can imagine, new-build condos are generally more expensive than pre-owned ones, owing to modern materials, advanced construction techniques, more technology, and the appeal of a new, unused space. On the other hand, pre-owned combos are often more affordable, especially if you want to move into a well-established area where new builds are either rarer or considerably more expensive.

Financing Options and Down Payment Differences

The type of condo build can influence both financing and down payments. Depending on the age and condition of a pre-owned property, lenders may ask for higher down payment amounts or offer different mortgage options and interest rates, while developers of new condo builds may offer incentives, such as reduced closing costs or customization packages. It's definitely worth checking out these types of incentives before making a decision.

Ongoing Expenses

Maintenance Fees: Pre-owned condos often already have established maintenance fees covering the upkeep of common areas and facilities. While these fees may be higher due to ongoing repairs and needs, they can also give you a good idea of what to expect in terms of ongoing expenses. As everything is new, new builds typically have lower expected maintenance fees but also run the risk of increases as the property gets older.

Utility Costs: This is one of the potentially biggest areas of cost difference. Generally, new condos are built with energy efficiency and eco-friendliness already in mind, so your utility bills could be considerably lower than with old condos with older, less efficient systems in place.

Property Taxes: Property tax assessments for new builds can vary widely during the construction phase, so be aware that the taxes could increase once the property is finished and fully assessed.

Appreciation and Resale Value

Historically, pre-owned condos in established neighbourhoods have shown consistent property value appreciation rates due to their location and the area's desirability. On the other hand, new builds can appreciate rapidly, especially if they are in up-and-coming areas or have unique features that attract buyers. However, they are also a bit riskier as it may be hard to predict how a new neighbourhood will actually develop.

When it comes to resale value, a lot depends on how the real estate market shifts during a particular time frame. Pre-owned condos in prime locations generally retain their value well, so barring major developments or issues, they are a safe condo investment. New builds could benefit from being in emerging areas with significant growth potential, but they may also hold a few more risks due to less established benchmarks in their areas.

Location Considerations

Most of us have heard the adage "location, location, location," and the same applies to condos. Pre-owned condos are often located in mature, well-established neighbourhoods, making them an attractive option for families and professionals. These neighbourhoods are often more centrally located, close to amenities like public pools, green spaces or museums, but also established schools and public transport. On the other hand, many new condo complexes focus on newer areas that offer growth potential with modern infrastructure improvements that often attract professionals, individuals, and families looking for more modern living environments.

Amenities and Features

As mentioned above, older condo complexes typically have amenities such as gyms, pools, and common areas, with their condition and features depending on the age of the complex. Some of these older buildings have a charm that may outweigh the need for the latest facilities. New builds may feature similar amenities but often focus more on shifting requirements like smart home features, energy-efficient appliances, and more contemporary common areas. In some cases, new builds also try to maximize living space instead of common amenities.

When looking at customization and upgrades, your options may also vary depending on the property's age. With pre-owned condos, you usually have the option of renovating or upgrading to personalize the space, while with new builds, depending on when during the construction phase you enter the purchasing process, you may have the choice between different finishes, layouts and features to be implemented during construction, allowing you to move right into a customized condo.

Many buyers, especially if they have children, prefer moving into an established community with a character and lifestyle they can experience before actually moving there. They can get a feel for what it would be like to live there and gauge if it matches what they like or are comfortable with. With new community developments, buyers can be part of influencing what the new neighbourhood is going to be like, but it also comes with a sense of the unknown, as you can't predict how the community may develop.

Pros and Cons Summary

When trying to determine which option best matches your needs, you must weigh the pros and cons. These differences may not seem like big differences at first, but when combined, they can give you a clearer picture of what might be a better match.

Pre-Owned Condos

Some of the biggest pros of looking at pre-owned condos are that they often are in established communities that allow you to experience what it could feel like to live there. Similarly, these older condo complexes have already settled in staff, property managers, and a board of directors who are familiar with the building and occupants, which can help with known issues.

Given that the condos are older, they often come at a lower cost than brand-new housing developments, making them more attractive and affordable for individuals or families to move in. This leads to another big pro: you can move in almost immediately. Unless renovations are to be done, the condo already has appliances and finishes, so there will be no delays.

Older condos often also have higher square footage and room sizes. New constructions usually try to fit more condos into smaller spaces, so buying pre-owned might give you more space for your money.

On the other hand, appliances and finishes may not be as modern and energy efficient, which could add to your expenses, whether on your utility bill or by buying new, more energy-efficient models or reflect in higher maintenance costs. Many older complexes also have fewer modern amenities or features, which could influence your decision, like garbage chutes, state-of-the-art gyms, community spaces, etc.

New Build Condos

Brand-new condo builds often boast more modern amenities, including high-end gyms or home theatres and swimming pools. Many also emphasize technical advancements with smart home technology and other bells and whistles that older developments may not offer. Customizing your condo through different design and layout options while it is still under construction can allow you to move into an already personalized space without having to perform (and wait for) renovations to be done. You also know that everything, such as appliances, is brand-new, so as long as you take good care of things, you know they will last for a long time and that you don't inherit any issues from previous owners.

On the downside, just like with all new and shiny things, these pros often come at a higher price point. Whether the developer is trying to recoup their investment or the cost of amenities within the complex being added to the general cost of living, it can affect your budget. Moving into a new building that might still be under partial construction can also lead to construction noise or potential construction delays, which can become tricky if you have a move-out day of your current lodging.

Many new developments also increase the population density, meaning that new condos often have less square footage or use engineered building materials to make walls and ceilings thinner to maximize space. This could lead to a higher sound transfer between buildings as well.

Making the Decision

In the end, there are many factors to consider when assessing which of the two options best fits your situation. Take stock of your personal priorities.

- What is your budget?
- Do you have a particular location you want to move into or be close to?
- Are you more interested in a well-established community, or do you prefer a more modern living space?

You also have to consider factors such as family planning or future needs to avoid having to move again in the foreseeable future.

Talk to Our Professionals

Buying a condo, whether pre-owned or new, is a significant decision you shouldn't take lightly. Weigh the pros and cons and determine which aligns more with your personal situation and goals to ensure you don't just jump into a purchase. If you are unsure or have additional questions, the professionals at Condo123 can help you ensure you can make an informed decision.

We have served Toronto and the GTA for many years and have a proven track record of efficient and professional real estate sales, from pre-construction to pre-owned homes.

Call today at 416-930-3063 to find out how we can help you find your first home!