Compare that to if you bought a car in 2008.

Back then, brand-new Toyota Corollas cost around $30,000. 

Today that 2008 Corolla would be worth between $4,500–$11,000.

It depends on how many kilometers it’s driven and how well the owner looked after it. 

• So, the new car lost 80% of its value. 
• The new house gained 150% of its value. 

To be fair, some old cars have become classic collectibles and have gained value.

But the general rule is: 

• New cars tend to go down in value. 
• New houses (like most houses) tend to go up in value. 

But maybe new houses don't go up in value as fast as existing properties?

You might think: "OK, so maybe New Builds don't lose value … but what if they don't grow in value as fast as other properties?"

Again – let’s explore the data.

Here’s the average value of those 2 groups in Auckland City. The properties that were new in 2008 and the properties that were existing in 2008. 

And this graph shows how fast house prices are going up or down.

See how the two lines are really similar? There’s very little difference in it.

What about in other cities? Here are the numbers for Christchurch.

Again, see how the lines are really close together? New Builds and existing properties go up at a very similar rate.

Yet, even after you look at that data, you might think: 

“But if a new property starts to lose its newness. Surely that has an impact?”

We humans love to believe things (even if they’re not true)

Let me ask this. 

If you bought an old property and renovated it. 

It now feels newer and more modern. It has ‘newness’.

Does that mean it’s going to go down in value next year? 

Does it mean that the house isn’t going to go up in value as fast as others?

It’s easy to ask these ‘what if’ questions and, create stories, and tie ourselves in mental knots. 

So, in these cases, we’ve got to step back and look at the facts. We’ve got to look at the data. 

And the facts are that whether a property is new or old … doesn’t really impact how fast it goes up in value. 

New builds are not right for everyone

Don't get me wrong, New Builds are not right for every investor. And that's OK. 

But at Opes Partners, we believe in evidence-based investing.

That means basing our decisions on data rather than our first impressions or what "my mate Dave said". 

Because when you've got the right data, you make better investment decisions. And that way you make more money.

So next time someone says ‘new builds don’t grow’, ask: “What does the data say?”