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Building vs Buying a House - Which is Best for You?

Industry News 10 Jan 2023
Young family looking at their buying and building options

You’re at a crossroads and deciding whether to invest in a newly built property or an established home.

In many cases, it can be a difficult decision. Some assess the immediate costs, while others try to weigh up the long-term expenses. Then there’s the question of lifestyle, proximity to capital cities and whether a modern or existing house is a better fit.

Whichever way you look at it, there are unique considerations for every home buyer and there isn’t a one-size-fits-all solution when it comes to the property market.

Pros and Cons of Building Your Home vs. Buying

Here, we look at the benefits and disadvantages of building vs buying a house to help you make an informed decision.

Building a brand new home

A new home is a dream home for many people. Perhaps the most compelling reason homebuyers are drawn to new homes is the peace of mind they offer.

A newly built home comes with fresh fittings and finishes, the latest in appliances and a contemporary floor plan that is designed for comfort and functionality.

The need for repairs and maintenance is minimal, often non-existent, and will only kick in when the house starts to age and this may not be for 10 years or more. New homes also come with builder’s warranties, so if any problems do take you by surprise in the early stages of your residency, you can always rely on the warranty.

An existing property will sometimes have the need for immediate repairs. While these issues may be spotted in a building or pest inspection done prior to the signing the sale contract, it still means the buyer will have to spend more money after the purchase.

New homes are customisable and this is a huge win for buyers, whether they want a lot of specific changes or just a few. It may be a larger than average al fresco area or the addition of a butler’s pantry – whatever it is, new home builders can make a wide range of customisations to a house to ensure it’s just right. Not making any compromises on design and quality is undeniably a significant advantage.

Usually, the building process that accompanies a new home takes longer than buying an established home. However, this often gives people a chance to boost their savings for a home loan deposit before mortgage repayments start. During this time they also have the satisfaction of designing their dream home and watching it take shape.

New home buyers who decide on a house and land package and move into a masterplanned community, particularly those offered by Satterley, are also assured of enjoying a wealth of nearby amenities. These may include parklands, playgrounds, walking and bike paths as well as local shops, schools, libraries, medical facilities, all serviced by roads and public transport connections. A lot of these amenities are built at the start of the construction period, so residents can enjoy them by the time they move in.

Topping it all off are the cash incentives offered by the federal and state governments. These make buying a new home a more affordable investment, particularly for first home buyers eager to reach the milestone of having their very own home. See more below.

New homes are customisable and this is a huge win for buyers, whether they want a lot of specific changes or just a few.

Buying an established home

Buying an established house is a relatively simple transaction when compared to building or buying a new home. Homebuyers search for their preferred home and make their choice based on what they see during the inspection process, buying both the land and the home in one fell swoop and knowing it will look exactly as it appeared when they move in.

Whereas buying a new home relies on buyers making selections for everything from facades through to tapware. To do this, they must visit display homes and design studios. For some, it can be difficult to visualise the end result of the choices they make.

For many, the obvious appeal of an established home is it’s history. Depending on the era it was built in, the home may have architectural qualities lending it character and charm that isn’t easily replicated in newly built houses. However, it’s important to note that maintaining these historical features may call for specialist tradespeople and can be costly.

Buying an established home is a relatively simple transaction when compared to building or buying a new home.

Victorian first home owners can receive $20,000 if they buy in a regional area or $10,000 in a metropolitan area. The house must be less than five years old and valued at $750,000 or less.

Victorian first home buyers can also save their hard-earned by claiming a stamp duty exemption or 50 per cent duty reduction when they buy either a new or established property with a value of between $600,000 and $750,000.

First home owners in Queensland can receive $15,000 towards buying or building their new house, unit or townhouse, as long as it’s valued at less than $750,000. Eligible first home buyers receive stamp duty concessions on properties up to the value of $550,000.

And in Western Australia, first home buyers are eligible for a grant of $10,000 who buy or build a new property. They can also apply for an exemption to pay stamp duty on house and land properties with a value of up to $530,000, and $400,000 for vacant land.There’s a lot to consider when making such a large investment, particularly for first home buyers who face the challenges of getting a foothold in an expensive property market. Fortunately, cash grants and stamp duty exemptions go a long way towards making the dream of owning a new home more affordable and achievable. As always, it’s important to seek professional advice from a finance expert or mortgage broker before signing along the dotted line.