So you’ve made the decision to buy a home. Statistically you’re one of about 9% of greater Edmonton households that will purchase a new or resale home this year. It’s a big move regardless of what you buy so here’s a few things to think about.
New VS. Resale
Let me state clearly that I work with clients in the new home industry, but I will try to keep my bias in check. Because I have purchased both types of homes (a few times) I think I can remain objective.
Price is generally the reason people start searching in the resale market. And, at first that appears logical. In general, resale home prices range from 15% to 20% less than new homes of similar size and style. However, that’s not always true in today’s market conditions. A large amount of new lot supply and an increase in new “value priced” condos has kept a lid on prices and made it possible to buy a “new” home for as little as 5% above resale prices – certainly in the entry level segment. Virtually a dead heat when it comes to price. A key consideration is that you must pay GST on a new home while you do not pay it on a resale. However, the rate of GST is subsidized modestly for homes under $450,000 so
the impact is lessened somewhat.

You should also consider the hidden costs of buying used. First – you will have to fix all those items (no matter how small) that impact a resale homes safety and performance. Leaking faucets, running toilets, drafty windows and doors, inefficient furnaces, hot water tanks in need of repair or worse, creaking garage doors, worn out appliances, and a litany of other “can’t see until you move in” kind of things.
Second, there’s personalization and décor changes or upgrades. Musty old carpets with a few stains, scratched or damaged hardwood, chipped or discoloured paint, broken railings, casings and light fixtures, and of course out of date counter tops, cabinets, etc. These items collectively can add from $25,000 to $40,000 to the cost of a used home almost immediately. All of a sudden that great price disappears faster than those big savings you thought you had.
And, In The Future
At the end of all this inconvenience and expenditure you are still essentially living in an older inefficient home. The technology integrated into today’s homes, particularly regarding energy and water efficiency, can save you about $700 PER YEAR over
an average sized used home. And, that’s at today’s resource prices! Since 2000, oil prices have risen over 400%, utility rates have gone up 115% and it’s reasonable to assume this trend will continue in the future. So, purchasing a new home built to the highest sustainable standard is not only “smart” for your family and the planet, but is essential for the
health of your budget.

Many Alberta builders have embraced sustainable building practices that could save you thousands of dollars over the life of your home. So, the battle rages. New or used. It really depends on the product you find and the price you can negotiate. Just remember to think through all the costs associated with the sale and compare them prudently. Only then can you make the perfect home purchase for your budget.