Every purchaser of every product on the planet wants the same thing: fair value for their money. Far too often we’re disappointed in our purchase – feeling that we’ve overpaid for a product.
When it comes to purchasing property this is especially true. For most of us, our property purchase is one of the largest purchases we will ever make. It’s for that reason that a property purchaser will carefully research the market before putting pen to paper. And rightly so.
In most cases what property we purchase is influenced by our affordability. In addition to the purchase price we need to factor in transfer duty – often quite a significant cost, and one that the bank won’t finance.
That’s one of the reasons why purchasing a property in a development offers such good value. The selling price will include VAT instead of transfer duty – and the banks will finance a percentage of the total selling price including VAT. This can potentially make the difference between you purchasing the property you really want, or one where you have to find the cash for the transfer duty.
In addition to this, most developers in the past few years have really made an effort to bring a product to market that is competitive with resale properties. Developers have paid attention to buyers’ needs and created products that are in demand, and fairly priced.
Many developments are sold as “turnkey” products now – where the purchaser only pays when the building is fully complete and handed over. This takes away the stresses and concerns of building, and removes the risk of delivery.
So now a purchaser can move into a brand new home, with his choice of finishes from the developers’ range, and only pay on completion. He qualifies for the maximum bond, which includes finance on the VAT portion – and can thus purchase for more than he potentially could if he was buying a resale property.
What’s more, with the advent of the Consumer Protection Act, the purchaser also has the peace of mind of knowing that he will get exactly what was promised and what the contract said. And for 6 months after transfer the developer has to repair all snags and defects.
Not only is this true in the lower and mid price ranges, but also in the higher price ranges of R 4 million and more. Strong demand across the board has meant that developments that may not have been feasible a few years ago now show excellent potential.
The bottom line is that, if a supplier produces a product that the market wants, at a price that represents good value – the buyers will respond. A healthy property market and increased demand for property has resulted in most purchasers moving into property worth considerably more than they paid by the time they take ownership. So next time you consider a property purchase be sure to look at developments as well as resale properties.
Principal of Harcourts Platinum, and Director of Harcourts South Africa
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