Is it better to buy a new or established investment property?

Property investors often face the dilemma of whether to buy new or old. We take a look at the major considerations for both new and established dwellings to help you make an informed decision.

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It’s the old versus new debate. Are you better off investing your hard-earned cash into an old property that offers value-adding and equity building potential, or a brand new property that guarantees higher tax and incentives and better quality tenants?

While the value of a property is influenced by several factors-- including location, size, aspect and amenities --the decision to buy a new or established dwelling is just one of many issues to consider when buying an investment property.

We break down the key considerations when weighing up between new or old.

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Buying a new property

New investment property


  • Depreciation benefits. If you’re an investor, the newer the property the higher the amount of depreciation available to you. You can deduct 2.5% on the property itself for 40 years which can lead to a significant tax deduction. Appliances such as air conditioners and dishwashers generally have a high rate of depreciation. For more information about the tax benefits available to you, visit the Australian Taxation Office (ATO) website.
  • Tenant appeal. Typically new dwellings are perceived to be higher quality which means you may have greater tenant appeal. This is because tenants will be attracted to modern appliances and technologies such as reverse cycle air conditioning and will be prepared to pay a premium. The ability to attract high quality tenants could mean that you lower the risk of untenanted periods for your investment property.
  • Protection. Builders of new properties in Australia are required to take out home warranty insurance which protects you in the event of a major building defect.
  • Low maintenance. When you buy a new property, you can benefit from the convenience of not having to spend money on repairs or ongoing maintenance.
  • Security. Most items for a new property are under warranty which means you can minimise your ongoing costs as they are covered by builder’s warranty insurance.
  • Government incentives. There are stamp duty concessions and grants available for first home owner grants when buying off the plan which could significantly reduce your upfront and ongoing costs.


  • Less affordable. Depending on the location and property type, new dwellings are generally more expensive than established dwellings which could mean that you struggle to meet your repayments. In addition, new properties often have high strata fees associated with maintaining communal facilities such as gyms and pools which could harm your cash flow.
  • Limited value-adding potential. There is little opportunity to add value to the property once you’ve purchased it so it may take longer to achieve capital growth.
  • Greater market risk. New properties are often the first to see price declines when the market softens, while established properties will either maintain their price value or experience a minimal adjustment.

Buying an old property

Established investment property


  • Renovation potential. A major advantage of buying an established property is that you can renovate and add value to the property which can boost your equity. These renovations are often tax deductible.
  • Affordability. An established property is generally more affordable than a new property which means that you may be at less risk of facing mortgage stress levels. Enter your details in the calculator below to see how much you need to earn to live in the suburb of your choice.
  • Property history. Historical data about the property will give you an idea of how the property value has changed over time which can help you make an informed decision.
  • Negotiating power. When you buy an established property, you have the ability to negotiate for a fair price. Vendors of established properties often have a motivation to sell relatively quickly so you can use this to your advantage to negotiate a bargain.
  • Capital growth. Generally a well-bought established property will outperform the averages over the long term and experience high capital appreciation which will benefit your long-term cash flow.


  • Maintenance. An older property may require upgrades and repairs due to wear and tear on the property over time. Not only could this eat into your profit, if a major renovation needs to take place, this could mean that you risk loss of rental income if tenants need to temporarily vacate.
  • Lower rental return. If the property is run down, the rental return will typically be lower compared to a new property.
  • Less appeal. Established properties typically have less appeal than new properties as they may have an outdated design.

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Rates last updated February 23rd, 2020
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
UBank UHomeLoan Variable Rate - Discount Offer for Investor Variable P&I Rate
$0 p.a.
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
Athena Variable Home Loan - Investor, P&I
$0 p.a.
Athena offers one of the lowest rates in the market for investors. No ongoing fees and no application fee. Principal and interest repayments.
State Custodians Low Rate Home Loan with Offset - LVR up to 80% (Investor, P&I)
$0 p.a.
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account. This loan is not available for construction.
Virgin Reward Me Variable Home Loan - LVR <= 80% ($500k to $750k Investor, P&I)
$10 monthly ($120 p.a.)
A flexible variable loan for investors. No application fee. Smart Home Loan - (Investor, P&I)
$0 p.a.
A competitive variable investor rate for borrowers with 20% deposits. Low fees, redraw facilities and repayment flexibility.
IMB Fixed Rate Home Loan - 3 Years Fixed (LVR ≤90% Investor, P&I, NSW and ACT borrowers only)
$6 monthly ($72 p.a.)
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
Macquarie Bank Basic Fixed Home Loan - 3 Year Fixed Rate LVR ≤ 70% (Investor, P&I)
$0 p.a.
A principal and interest loan for property investors with a 30% deposit.
Gateway Bank Low Rate Essentials Variable Rate Home Loan - Special offer LVR up to 80% and over $500k (Investor, P&I)
$0 p.a.
Investors with 20% deposits can get this flexible variable mortgage with low fees and a reasonable rate.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, P&I)
$0 p.a.
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Macquarie Bank Basic Fixed Home Loan - 1 Year Fixed Rate LVR ≤ 70% (Investor, P&I)
$0 p.a.
This fixed investor loan keeps it simple and boasts a low rate. Requires a 30% deposit.
Pepper Money Essential Prime Full Doc Home Loan - LVR >75% up to 80%
$10 monthly ($120 p.a.)
This is a competitive, flexible variable rate suitable for borrowers with a good credit history. Borrow up to 80%.
State Custodians Low Rate Home Loan with Offset - LVR up to 80% (Investor, IO)
$0 p.a.
A competitive rate with no application or ongoing fee. This loan is not available for construction.
ING Orange Advantage Loan - $150k to $500k (LVR <=80% Investor, P&I)
$299 p.a.
Investors can enjoy a 100% offset account, a redraw facility and flexible repayments.
State Custodians Low Rate LOC - LVR up to 80% (Investor, IO)
$0 p.a.
Investors can easily access their equity using BPAY, a debit Master Card or cheque book with this interest-only line of credit. This loan is not available for construction.
UBank UHomeLoan - 3 Year Fixed Rate (Investor, P&I)
$0 p.a.
Pay no ongoing fees on this investment loan fixed for 3 years.
State Custodians Low Rate Home Loan with Offset - LVR 80% to 90% (Investor, P&I)
$0 p.a.
Access a fee-free offset account and a special interest rate for investors. This loan is not available for construction.
Pepper Money Essential Prime Alt Doc Home Loan - LVR up to 55%
$10 monthly ($120 p.a.)
A competitive rate home loan with an offset facility for self-employed borrowers.
ANZ Breakfree Home Loan Package  - $500,000 plus (LVR <=80% Investor, IO)
$395 p.a.
Pay no application fee with 100% offset account with redraw facility and borrow up to 95% LVR.

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Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2019 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

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