Based on the Australian national average, it could be about $90,000 cheaper to buy a home vs building one. Of course cost isn’t the only factor to consider when making this huge decision. Location can also have an impact on this estimate as data from regional areas is harder to find; it may be cheaper to build vs buy in regional areas.
Who doesn’t love receiving something unique—particularly if it’s made especially for you? The question is if custom-made things are worth the time and money they take to obtain. We’ve weighed up the pros and cons of building a home so that you can make an informed decision.
Pros of Building a House
The ability to tailor your house to your exact preferences is a huge benefit of building. Designing everything from cabinets, flooring, layout and size to lighting, colour schemes, fixtures and doorknobs, everything will be exactly what you dreamed of. This will make it so much easier to decorate your home once you’ve moved in and you won’t have to worry about renovating.
No Buyer Competition:
If you’re shopping for a new home then you have likely seen the ridiculous amount of buyers in the market at the moment. On average homes stayed on the market for just 32 days in 2021. Building a home means you can skip the packed auctions and relax knowing your home is a guarantee.
Little to No Maintenance:
New houses are constructed following current building codes and feature brand new and modern technology. Building a new home means you likely won’t need to make any repairs for the first several years.
“We rarely see roof repairs on new homes with products like COLORBOND® steel which are super durable compared to traditional styles you see on most older homes” notes the roof specialists Roofing to Perfection.
Most builders even offer limited guarantees on their homes so you can rest easy knowing if something goes wrong it won’t be your problem.
New homes are constructed with energy efficient features and materials.
“Energy efficient fixtures means you will be living on less emissions and ultimately pay less in energy expenses” says electrician Radnor Sansoni.
New and Fresh:
A brand new home means everything is pristinely clean, works like it should and is just waiting for you to enjoy it. You won’t need to worry about scrubbing off years of grime which means you can relax as soon you move in.
The First Home Owners Grant (FHOG) is available in a few states and territories and is offered to people building a home. The FHOG is worth upto $10,000 and is only available for people building or buying a brand new home. If you’re building a new home your land and build must cost less than $750,000 to be eligible.
Lower Stamp Duty:
Building a house means you will only pay stamp duty on the lot of land rather than the property. In Sydney building on median-priced land will garner about $16,000 in stamp duty but buying an established home in Sydney at the median price of $889,000 will cost around $35,000 in stamp duty, over double!
Cons of Building a House
Longer wait to move in:
It takes about 7 months to build a home and that doesn’t even include the time you spend looking for land, planning and waiting for approvals. If you are going to build you’ll need another residence to stay at while construction is happening, meaning you’ll be paying for two homes at once.
Hard to Negotiate:
While you may be able to negotiate the cost of an existing home, closing costs and purchase prices from builders generally have little to no wiggle room.
Stress and Mess:
Constructing a home near other new houses means you will be dealing with construction noise, commotion and mess for an uncertain amount of time. You will also need to deal with tradies regularly throughout the home building process which may add stress to your life.
Lots of Decisions:
With great power comes great responsibility. You are going to make a million decisions throughout your build. You will pick the land, the house design, flooring, hardware, cabinets and countertops, wall colours and trims. Not only are these decisions super stressful and time consuming, they also require you to watch the budget closely because different options come at varying prices.
“A major issue with budgeting is the huge disparity between prices for different materials” explains the team at Castle Supplies. “Things like marble countertops are so much dearer than granite”.
Oftentimes the “price” you see when building a home is only a base. You may be lured in with specific finishes that you don’t know cost extra until it’s too late.
“We have a lot of clients who obtain loans for the base price of a build and then are devastated when they are hit with additional fees later on,” say home loan specialists from Crew Financial.
The initial cost of building a home will often increase as different add ons and edits are made. Not every cost will be rolled into the contract price and you will likely need to set aside money for things like landscaping and blinds.