The home building vs buying debate has raged for years. But, how do you know which option is most suitable for you? As with any purchase, there are advantages and disadvantages to buying new or pre-loved. So, before you make any decision it’s essential for you to consider these, as well as your needs. Let’s compare building vs buying a home now, allowing you to select wisely and make an informed decision.
Advantages of Building a New Home
The positive aspects of buying a new home are many, especially if you’re looking to upsize, downsize or invest. In fact, some of the most notable advantages include:
Design and land choice
There are a vast number of builders in Australia and a wide range of house and land packages available. So, your options are extensive. Also, you have the opportunity to ‘tweak’ an existing home design to suit your purposes. For instance, you may want to add a butler’s kitchen, extend the main roof over an entertaining area, or even make your windows larger. All these changes cost a fraction of the cost of changing an existing property.
Many builders offer new home incentives. These deals typically include full home air-conditioning packages, upgrades to premium fixtures and fittings and the inclusion of higher ceilings. Opting for one of these options could add value to your property and it could also save you thousands.
If the property is an investment, then you can depreciate items within the property over your years of ownership. Subsequently, tax benefit could shave thousands off your tax bill.
Increased energy efficiency
New homes must follow current energy laws and legislation. Therefore, your home will have water-saving devices, more efficient lighting, and even solar power, if you opted for this inclusion. All these features use less energy than an established property, which means reduced long-term costs.
Australian home builders must hold a current registration or license and provide a warranty for a set duration under government legislation. This warranty gives the home buyer peace of mind and a guarantee against any major problems occurring.
Greater capital gain
In most instances, a new home is typically worth more than it’s build cost after completion. For example, a property built for $240,000 including land cost, with an added $20,000 spent on flooring, landscaping, lights, and curtains, returns a valuation of $320,000 after completion. This property has then made a capital gain of $60,000 over the 12-months that it took to complete.
Disadvantages of Building a New Home
On the other hand, the drawbacks of buying a new home include:
Building the home takes time
New home building, on average, takes between 9 to 12-months from the signing of the contract until you move in. Therefore, you need to be patient.
Unless you have a fixed-priced contract that includes any issue met, then you may find your builder adds more costs to your build. These other expenses may include the removal of bedrock for solid foundation creation, the need for a pump, or added fill to ensure proper drainage or even reinforced foundations to avoid foundation movement. These issues could increase your expense by thousands.
Confusing construction processes
While the new home consultant explains the process of building, often the process can be long-winded and complicated. You’ll also deal with many people and this can leave you feeling a little overwhelmed, especially if you encounter a problem.
Often many people overlook home finishing costs such as fencing, flooring, light fittings, and window coverings. So, unless you’ve bought a turnkey package that includes these, then you’ll need added funds to complete the home, which can add up.
Advantages of Buying an Established Home
An established home is a dwelling built by someone else. These properties can be near-new or may be years old. Typically, these homes are usually situated on larger blocks closer to the city, and surrounded by amenities and infrastructure, such as schools and public transport.
The advantages of buying an established home are as follows:
Larger block sizes
Land sizes vary for established homes, but these are still bigger than today’s new house and land packages. Many established homes have back and front yards along with a good-sized dwelling. Although, if you wish to replicate the same with a new build, then this will cost you a great deal more.
Able to move in quickly
Buying an established home means that you can often move straight in after settlement. Settlement can take place within 30-days, which means that there is minimal disruption to your life. Purchasing a new home, however, takes Also, you may meet delays and other problems during the building process that can prolong construction even further.
The home comes complete
Established homes come finished so you can move straight in. Of course, not all decor may be to your liking. However, over time you can make changes so that your home accentuates your taste. Consequently, the beauty of this is you do not have to make changes at once, so it’s budget-friendly. Furthermore, established homes have landscaping, which means you do not have to put in a garden.
Greater potential to add value
You can also add a great deal of value to an established home by making upgrades and renovations. Whereas a new home’s value may take longer to appreciate.
Disadvantages of Buying an Established Home
Shortcomings of buying an established home include:
- The home may not be meet your needs ideally.
- You may have to repaint and make improvements to the property.
- Property problems may need repairing.
- No warranty covers the dwelling problems that you uncover.
Are you looking to purchase a new or established home? Then contact eChoice, we can help you understand the costs of both options and where you could save. Plus, our brokers have access to 100’s of products, so we’ll find the right mortgage for you. This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs. Submitting your enquiry An eChoice home loan expert will be in touch soon.
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This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs.
Submitting your enquiry
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