Tossing up whether to build or buy a house is a tough call. In this article, we save you valuable research time by laying out the pros and cons of each approach. While there are no right or wrong answers, there’s a lot to be said for knowing what’s going to best suit your needs, budget, lifestyle and timeline.
Before You Build: Must-Know Advice
The lure of a brand new home is an exciting proposition: a unique chance to add your own style and soul into a completely custom creation. But, there’s much more to the decision than design and decoration.
Location is your first consideration. If you’re a die-hard inner-city dweller, then finding vacant land will be a challenge. The good news is that you can go down the path of knocking down an existing home and doing a rebuild. The alternative is buying into a new estate. By their very nature, these land releases are usually some distance from major city centres – however they do offer the advantage of up-to-the-minute designs and contemporary luxuries.
Next up, finance. Finance comparison company Canstar stated that, “building can be a cheaper option for almost all property types”. New homes may offer significant advantages in stamp duty savings, first home buyers’ grants, and tax depreciation benefits. Ongoing maintenance is also cheaper – knowing that you won’t have major bills for some years, and with the backing of a building warranty. Ongoing running costs are usually lower, especially if you build with energy efficiency in mind. But the place to really focus your attention is the building contract: to understand if it’s fixed-price and what it does and doesn’t include. A fixed-price arrangement will provide certainty about cost and timing, while doing your research will ensure you budget properly for any extras, like landscaping.
Then there’s timing. Sourcing land, choosing the right builder and constructing a new home all take time: it’s not a quick-fix solution. But, when you put it in context, what’s a window of time worth when your dream home lies at the end?
Before You Buy: Risks and Rewards
Buying an existing home provides more flexibility on location, especially if you’re after city chic or character-filled suburbs. Older blocks are often larger and you won’t have to establish a garden from scratch. You can make your move-in almost immediate and put the process behind you.
The downsides? It’s usually much more competitive to buy an existing home than to buy new land, and the disappointment of missing out can be wearing. In theory, you should know about building defects from the building inspection but you can still be in for surprises: the roof that springs a leak or a paint job that’s covered up an underlying issue.