In some locations you may buy only second-hand flats
Location is the most important factor affecting attractiveness and price of a property. If you are about to buy a flat on the primary market, you should remember that you will have a smaller choice the closer you are to the city centre. As cities develop, more and more new residential estates are located in places where it is easier to buy plots to construct them, i.e. at the outskirts. If you decide to buy a flat on the secondary market, you will be able to live in estates where new investments are no longer possible. Moreover, in the “old” estates, there is already a full commercial and service infrastructure together with public utility facilities (nurseries, kindergartens, schools, post offices) which may be missing in the new ones for the next few years.
You need to wait for a new one
When buying a flat from a developer, it may turn out that you will have to postpone the planned date of moving in. Inexpensive and most popular flats are usually sold already at the construction stage. Therefore, it is possible that you will not find a flat for sale meeting all of your criteria that is ready to be handed over. If you are pressed for time, it is worth finding a flat for sale on the secondary market, which are mostly available immediately. However, if you are not in a hurry, it may be a good solution to buy a new flat at an early construction stage if you accept such a transaction risk. Flats which have just started to be built are often offered at lower prices than those “being finished up”.
Price and additional costs
A considerable advantage of the primary market is that it is easy to evaluate if a price of a flat is attractive. You are able to ascertain if it is a “market” price, at least by analysing the number of flats sold by the developer so far. Developers usually ensure that prices reflected the market situation, but in the case of second-hand flats for sale it may happen that some offers will be completely unreasonable. Emotional approach of an owner to the property offered for sale and setting a price on the basis of historical, out-dated levels are two most frequent reasons for inflating property prices by sellers on the secondary market.
One of the most significant differences between a new and a second-hand flat also include the type and amount of transaction-related costs, such as e.g. taxes. When buying a property on the secondary market, you have to remember about the need to pay a tax on civil law transactions of 2%, while a developer will add a VAT to the price. For a second-hand flat you will need to pay a commission fee to the real estate agency (if you use such services), but if it is in good condition and is sold together with furniture, you may save the amount you would spend on finishing and equipping a new flat.
Transaction security
In terms of transaction security, it seems that the risk is higher if a flat is bought at the early construction stage. When you take a decision to buy it, it does not exist yet, and you cannot be 100% sure that the developer will not meet all of its obligations. The earlier the construction stage, the higher the risk. The situation of those who buy flats under construction will change for the better after entry into force of provisions of the Act on protection of rights of a buyer of a flat or a house, i.e. on 29th April 2012. Their aim is to regulate the rules of buying flats and houses from developers. However, will the new regulations effectively protect interests of those wishing to buy a flat? We will soon find it out...
