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Pros & Cons of Buying New Construction



This one is pretty obvious. You’re getting a home that no one has ever lived in, the materials are all brand new, appliances are new, everything is just new and shiny. You get to move into a home that's in the best condition it’s ever been in.


With any new construction home you’re going to get warranty on that home. Here in Alberta, we have a tiered system that gives you coverage up to 10 years.

First up, you get 1 year parts and labour warranty on basically everything. Anything that goes wrong with the home, it can be dealt with within the first year. This could be anything from big issues, down to simple nail pops in the drywall, this first year covers it all.

For 2 years you get parts & labour warrranty for all distribution systems. This includes any of the systems or components related to the electrical, plumbing, gas, heating, ventilation, and air conditioning. So any leaks, furnace issues, hot water tank issues, things like that, you have 2 years of coverage for those items.

The next tier is the 5 year warranty, which covers the building envelope, which is anything that makes up the exterior of the home. This would cover any defects with things like siding, your roof, windows, exterior doors, and things like that. There also is the option to extend this tier of the warranty for an additional 2 years, which would give you a 7 year building envelope warranty.

Onto the last tier of the warranty, which is a 10 year warranty on the structure of the home. This would cover any part of the home that is load bearing and important to the overall safe structure of your home. Things like the foundation, trusses, and load bearing walls.

Warranty can be really nice to have in case anything goes wrong. Now keep in mind though, that this warranty is transferable to new owners. So if you’re not buying pre-construction, but you’re buying a resale home thats less than 10 years old, some of the warranty would still be active on that home!


Especially during your first 2-5 years under warranty, your maintenance costs will be very low since not much will need replacing or fixed. If you like to have less surprises, a new build can definitely be nice as compared to a 30-40 year old home where there is often lots of ongoing maintenance. Of course, the longer you’re in your new home, you’ll start to come into some maintenance that needs to be done, but at least for the first 5-10 years, there will be much less!


In a market like we’re in right now, depending on what you’re looking for, as a buyer you could be caught up in bidding wars if you’re looking on the resale market. With builders during very busy times, they may have a wait list, but you aren’t directly competing with another buyer. The builder price is the price that it will be, and it won’t be driven up like crazy from one desperate buyer thats willing to pay way over market value, which is nice.

Now, of course the flip side to this, is that in our current market, most builders aren’t going to negotiate down their price either. If you don’t want it at their price, then they’ll move onto the next buyer that does


If you have a specific style, or you want things to be a certain way and with certain finishes, then building can be a very good option as opposed to trying to find the perfect home on the resale market, especially if you choose a custom or semi-custom builder thats willing to make the changes you want! So building from scratch gives you the luxury of having your home be exactly what you want, without having to settle for something that works, but isnt the perfect fit.


No one can really say how long a build will take to complete exactly. Builders can give a range, for example on single family homes right now most will say something like 10-12 months, and for condos they may say Summer 2026 for example, but they cant give a definite date at the start of the project. Of course this makes sense as that would be impossible to predict, but it can make it tricky as a buyer. If you have a home to sell, or a rental you’ll need to move out of, having an up in the air possession on your new home can make things tricky.

On top of the open timeline, there can be additional unexpected delays throughout a built. We’ve become all to familiar with this in recent years, with supply chain issues causing some builds to be delayed 6-8 months in some cases. We’re not seeing much of that anymore, but there’s always the risk of unexpected delays!


Here in Alberta, although our sales tax is lower than most provinces, you still do need to pay GST on the purchase of a new home, as opposed to when you buy a home on the resale market from another homeowner, where you don’t pay any GST. This is rolled into the total purchase price of the home, so you pay it off with your mortgage, but it is important that you know that that cost is there. When you’re looking at new builds online, some include the GST on their prices, and others don’t so make sure you watch for that. It’ll usually be noted on the website if the price includes the GST or not, if f it doesn’t, then go ahead and add 5%.

On lower priced homes you might be eligible for a GST rebate of a portion of the GST. If this is applicable then the builder will typically claim the rebate themselves, and reduce the price of the home to reflect the rebate they’ll receive.


When you buy a new home, there are a number of items that are left unfinished typically, unless of course you pay extra to have them complete by the builder. A few of the most common examples of this are new homes not including a washer/dryer, window coverings, backyard landscaping, side fencing, or back decks.

Some builders now have started including washer & dryer as a standard, but many still dont. As for landscaping you’ll often get landscaping in the front yard, but the back is typically left as dirt. You’ll also typically get a rear fence that’s installed by the developer along the backside of your lot, but the side fencing between the houses will be the responsibility of the buyer and their neighbours. All these items added up could add around $20,000 or more that would need to be paid post possession, and wouldn’t be rolled into your mortgage.


The timeline of a new home, as we mentioned earlier, could be anywhere from 8 months, to up to a few years away. Knowing this, you’ll need to make sure you’re able to be approved for a mortgage down the road when the build is complete. At the start or throughout the build, you will have paid anywhere from 5-20% of the purchase price, in deposits. If you can’t close on the home come completion, you loose that deposit money. So, if your signing a contract for a new build you need to be sure you’ll be able to get financing when the time comes.

Of course there are options to get a new construction 12 month rate hold pre approval, but if you loose a job, buy a fancy new car, or have unexpected financial struggles from the time that you pay the first deposit to the time you’re closing, that could cause big loss for you financially if you’re unable to close. Comparing this to the resale home market, where when you buy a home, you’re typically closing in just 1-3 months, and there’s less opportunity for unexpected financial issues to happen.


This is opposite to what a lot of people have heard, or believe about the new construction market. You see it used to be that if you bought a new build home, or into a pre-construction condo project, you would receive a discount for the lenth of time it takes to complete, and the additional risk you’re taking as a buyer. Now with how high demand that there is for new homes, the builders and developers are able to charge a premium for those who want to build from scratch. In almost all cases I see, a comparable home on the resale market will be cheaper, and often much cheaper than the new one is.

Ultimately with a new build home you’re paying a premium for the luxury of building your home your way, picking your layouts and finishes, taking advantage of the extended closing timeline if you’re able to, and just simply for having a new home.



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