As a home buyer, you’ll be faced with a number of important decisions. One of the first of these is deciding whether to buy an existing home or to build from scratch. While each option has its own set of unique benefits and disadvantages, choosing between the two will largely depend on your own priorities. To help you decide, here are the pros and cons of buying versus building.
Buying an existing home
With vacant land in short supply in most big cities, one of the most important benefits of buying an existing home is its location: an existing property will usually be closer to the city center in an established neighbourhood, which means you’ll be closer to schools, shops and your workplace, and a public transport system will usually already be in place.
Existing older homes are typically built on much bigger sections of land compared to new builds, and most will already have an established garden, making these ideal family homes. Of course, with location comes cost and in most major cities where land is a premium, it’s very possible you’ll end up paying far more for an existing home than for a new build further out from the city.
Understandably, buying an existing home is a much quicker process and can usually be completed in under 30 days. A new build takes much longer and has the potential for even further delays if there are complications, often taking months even years to complete.
When buying an existing home, you’re able to see it first-hand and have a building inspector go over the property before you commit. That way you’ll know what you’re getting and you’ll be made aware of any potential issues you may have to deal with in the future. With a new build, it’s often hard to visualize exactly what the end product will look like simply from the plans. You also can’t do a pre-purchase inspection of your newly built home so you won’t know what problems could arise further down the line.
Building a new home
For many first-home buyers, building a new home makes good financial sense because of the savings and concessions available to them, like only paying stamp duty on the land value. Depending on which State or Territory you’re building a new home in, the savings vary but are considerable, making new builds a worthwhile option.
In many cases, building a new home can be more cost-effective: Developers needing to sell off a quota of properties off the plan before they can begin construction may discount initial sales to generate interest so you could end up paying a much lower price. Of course, buying off the plan has its own set of risks so it’s important you’re aware of these before deciding on this option.
On the down side, it’s not unusual for the cost of a new build to spiral upwards if you aren’t carefully monitoring what is being spent where. Before you commit to buying off the plan, ask questions, do your research, and check the contract to ensure the inclusions meet your expectations.
Probably the biggest benefit to building your own home is the amount of flexibility you have in choosing a design that works best for you and your family. And, as new homes are built to much higher energy efficiency specifications using new materials, the cost of the build can usually be off-set against the energy savings you’ll be making over the years.
How to choose
As with all property purchases, do your homework. Research both options fully before you decide which one would work best for you. If you’d like advice around financing a new home build or an existing home purchase, get in touch with us.