Should I Buy Or Build A House?
Buying or building a home is a huge investment in time, money and emotion. Should your buy outright or build? Let’s look at the pros and cons of buying an established home versus building.
Buying an Existing Home
An established area has a mixture of styles, architecture and home types. You also have access to all the amenities and resources that comes with an established area, such as transport links, schools and shopping centres.
PRO: Less Paperwork
When applying for a loan for an existing home, you will generally only need to provide evidence of a regular income, savings, and any personal debt you are servicing.
Any potential defects can be identified before the contract is signed. Defects can be extremely costly to rectify, and ongoing maintenance may be higher in an established home.
You can buy and move in quickly. Settlement on an existing home can be as short as 30 days. Building a new home can take months and the wait time is even longer if you buy off the plan.
CON: Buyer’s Remorse
With more choice comes harder decisions about whether you have bought the right property, or indeed whether you bought too quickly, when doing more house-hunting could have yielded something more suitable.
Building a New Home
You can buy a new home in one of two ways – either off the plan from a property developer with an existing design, or by engaging an architect to design your home and a builder to build it.
PRO: Government Assistance
If you are buying a new home or building from scratch and you have already laid the foundations of your home, you may be eligible for the First Home Owner’s Grant. The grant is only available for properties that are less than five years old.
PRO: More choice
If you can’t find anything on the market that suits your needs, you can build a home to your own specifications, with total control over many elements of the build. Keep in mind that building from scratch means paying for things such as fences, landscaping, fixtures and fittings that are already included in an established home.
New homes must include energy and water efficiency features. An energy-efficient home can significantly reduce your heating and cooling bills.
On average it takes around 8 months to build a new home from scratch. Some lenders will stipulate that a house be completed or partly begun within a certain timeframe as part of their loan conditions.
CON: Lots of Paperwork
Construction loans require copies of permits, contracts, plans and insurance. You’ll need to let your lender know of any changes to these requirements.