New from a developer or resale: which to buy

Buying from a developer, you first sign a developer agreement before a notary, pay into an escrow account in tranches tied to construction progress, and become the owner only with the deed transferring ownership — after handover and after the building is completed. Between the decision and the keys there are usually several months to two years.

Buying on the resale market, you sign a preliminary agreement and then a notarial deed that transfers ownership immediately. You get the keys on the handover day, usually within weeks of the deed. The procedure is shorter, but the whole burden of checking shifts to you and the notary.

That is why comparing price per square metre leads nowhere. The two paths differ in what you get for the money and when you get it, not in what a metre costs.

A developer flat is sold in shell condition: walls, plaster, windows and installations are there; floors, internal doors, the kitchen and the bathroom are not. The fit-out is a separate budget and on smaller flats is often the second largest expense after the flat itself. A bank will count it towards your contribution only if you include it in the application from the start.

A resale flat may be ready to live in — saving you time and money — or may need a renovation that, in an older building, reaches the installations rather than the colour of the walls. The gap between refreshing and replacing wiring and risers is several times over, so ask that question before the offer, not after.

On top of that come transaction costs, higher on the resale market because of the PCC tax, and included in the price as VAT on the primary market. How much exactly, and when the first-home exemption applies, is set out in our separate article on purchase costs.

With a developer the risk concerns time and quality: the completion date can slip, and the technical handover ends with a list of defects whose repair you have to enforce. The money is protected by the escrow account and the Developer Guarantee Fund, but nothing protects you from a delay except the penalties written into the contract — which is exactly the clause to read most carefully.

On the resale market the risk concerns legal and technical condition: who owns the flat, whether there is a mortgage, registered residents, unpaid service charges, easements or restitution claims. All of it can be checked before the deed — the land register, certificates from the cooperative or the owners' association, the minutes — and that is the difference: resale risk is verifiable today, developer risk resolves a year from now.

There is one risk shared by both paths and most often skipped: the neighbourhood. On a new estate the question is what will be built next door; in an old building, who lives behind the wall and how the association behaves when the roof needs doing.

A developer makes sense if you have somewhere to live during construction, want to arrange the flat your own way and prefer installations with no history. It also works well when buying to let in a specific location: a new building by the metro is the easiest to rent out and its running costs are predictable.

Resale makes sense if you need a flat now, do not want to live on a building site for the estate's first years, care about a specific street or want more floor area for the same money. In older districts it is often the only route — new buildings simply are not there.

The worst choice is the one made on price per metre alone. If the new flat is cheaper per metre but needs a fit-out and eighteen months of waiting while you rent — count both paths to the end, rent and fit-out included. Sometimes the cheaper one turns out to be the more expensive.