Should you build your dream home or buy established?
I am sure this is a question that you have already asked yourself if you have been thinking about buying a new home. Hopefully, the information we provide will help clarify some of the questions you may have. We will look at the pros and cons of both options so you can decide which option may work best for you.
At Lime Mortgage Brokers, we understand that buying or building a home is a major financial decision. Looking at the costs, your lifestyle, your future plans and the finance options available can help you make a more informed decision about which path may be right for you.
Table of Contents
Building Your Dream Home
Let’s start with some of the pros and cons of building your dream home.
One of the great things about building your dream home is that you get to start fresh. You also have complete creative control and can put things exactly where you want them.
New homes offer many modern finishes and features which you can customise to suit your lifestyle and tastes. There are also generally fewer costly repairs when you first move in, and many new homes use energy-efficient materials which may help keep the cost of living down.
If any issues arise, they may be covered by a builder’s warranty, depending on the terms and conditions. This can help with some of the upfront costs and concerns that may come with buying an established home.
Stamp Duty and Other Building Costs
Another potential benefit of building your own home is that stamp duty may be lower than purchasing an established property, depending on the circumstances and the state or territory rules that apply.
However, you still need to consider other costs associated with building. These may include fencing, driveways, landscaping and other items that may not be included in the standard building contract.
It is important to understand exactly what is included in your building contract before you begin so you can prepare for additional expenses.
What Are the Downsides of Building?
When building a new home, you cannot move in straight away. This means you may need to find somewhere to rent or stay while your home is being built.
Any upgrades you decide on for your finishes and fixtures can also quickly increase the cost of your new home. There may also be additional costs for fixtures and features that are not included as standard in your building contract.
If you are moving into a new suburb, you may also have to put up with additional traffic, construction and dust while other homes are being built around you.
Construction Loan Considerations
There is also more paperwork involved when applying for a construction loan.
You may need to provide documents relating to the construction, including building permits, contracts, plans and building insurance. You may also need to keep your lender updated throughout the build if there are changes to the plans, costs or contracts.
Understanding the construction finance process before you start can help you prepare for the additional requirements involved.
Buying an Established Home
Now let’s have a look at the pros and cons of buying an established home.
Buying an established home can still involve a lot of planning, but there may be fewer things to organise because the home has already been built.
When buying an established property, you may have the opportunity to negotiate the purchase price and potentially get more for your budget. It also gives you the flexibility to upgrade your home over time, rather than having to make every decision before construction begins.
This can give you more time to save additional funds and think carefully about what improvements you want to make.
Location and Established Infrastructure
Established properties can also be located closer to the city and existing infrastructure, depending on the area you choose.
Parks, schools, shops and public transport may already be available nearby, which can be an important consideration when choosing where to live.
The size of established blocks can also be larger in some areas. This may give you more outdoor space for a pool, a garden, or a kids’ playground.
Another benefit is that buying an established home can be a much quicker process. Once you have completed your house hunting, secured your finance and settled on the property, you may be able to move in relatively soon.
Renovating an Established Home
Buying an established home also gives you the opportunity to renovate and make improvements over time.
The right renovations and minor changes may increase the property’s value, depending on the work completed and the local property market.
This could help you gradually improve your home while working towards your longer-term goals.
Because the home already exists, it can also be easier to compare the property with similar homes in the area before making your decision.
What Are the Downsides of Buying Established?
There are also a few things to consider when buying an established home.
If the right inspections are not conducted before purchase, you could face problems after you move in.
It is important to have a good look around the property because maintenance required on an older home can become expensive.
You should also check the building plans and make sure structures and additions have the appropriate approvals. Depending on the property, you may also need to update outdated fittings and fixtures.
These potential costs should be considered before you go ahead and make an offer.
Building vs Buying Established: Which Is Right for You?
Both options offer significant benefits, but there is no single answer as to which one is better.
Building may be suitable if you want a new home designed around your lifestyle and are comfortable waiting until construction is complete.
Buying established may be more suitable if you want to move sooner, prefer an established location or want the flexibility to renovate over time.
Your budget, financial position, preferred location, lifestyle and future plans should all be considered before making your decision.
It is also important to understand how each option may affect your home loan and borrowing requirements.
How Can Lime Mortgage Brokers Help?
Whether you are thinking about building a new home or purchasing an established property, understanding your finance options is an important part of the process.
At Lime Mortgage Brokers, we want to help provide you with valuable information to guide you through the loan process and beyond.
We can help you understand your borrowing options and consider the finance requirements involved with purchasing an established home or building a new one.
You can also meet the Lime Mortgage Brokers team to learn more about our team and mortgage broking services.
Contact Lime Mortgage Brokers Today
If you are trying to decide whether to build your dream home or buy an established property, speaking with a mortgage broker can help you understand your finance options before you make a decision.
Contact Lime Mortgage Brokers today to discuss your home loan requirements and find out what options may be available based on your circumstances.
Frequently Asked Questions
Is it cheaper to build or buy an established home?
The cost can vary significantly depending on the property, location, land price, building costs, the property’s existing condition, and your chosen features. It is important to compare the total costs of both options before making a decision.
What are the benefits of building a new home?
Building gives you the opportunity to customise your home, choose the layout and finishes, and start with a new property. New homes may also have modern features and may come with applicable builder warranties.
What are the benefits of buying an established home?
An established home can allow you to move in sooner and may provide access to established suburbs, schools, shops, parks and public transport. You may also have more opportunities to negotiate the purchase price and renovate over time.
Do I need a construction loan to build a home?
A construction loan may be used to finance a new home build, with funds generally released in stages as construction progresses. Lender requirements can vary, so it is important to understand the finance process before starting construction.
Are there extra costs when building a home?
Yes. In addition to the building contract, you may need to budget for expenses such as fencing, driveways, landscaping, permits, upgrades and other items that may not be included in the standard contract.
Should I get a building inspection when buying an established home?
A building inspection can help identify potential issues with an established property before you purchase. It is important to understand the property’s condition and consider potential maintenance costs before making an offer.
Which option is better for first home buyers?
There is no single option that is best for every first home buyer. Your budget, deposit, borrowing capacity, preferred location, lifestyle and willingness to wait for construction should all be considered.
Conclusion
Choosing between building your dream home and buying an established property is a major decision. Both options have advantages and disadvantages, so it is important to consider what works best for your circumstances.
Building gives you more control over the design and features of your home, while buying established can provide a quicker move-in process and access to established locations and infrastructure.
Before making your decision, consider your budget, the additional costs involved, your future plans and how each option fits with your home loan requirements.
Here at Lime Mortgage Brokers, we want to help you make informed decisions and provide valuable information to guide you through the loan process and beyond.
“Our knowledge and experience is yours.”
Shawn Swart
t. 0415 761 799
e. shawn@limemortgagebrokers.com.au
w. www.limemortgagebrokers.com.au
Disclaimer
The information contained on the Lime Mortgage Brokers website and in its posts is for general information purposes only. Lime Mortgage Brokers assumes no responsibility for errors or omissions in the contents of this publication. The information we provide may not be relevant for all individual circumstances. You should always seek professional advice before taking action in relation to any of the matters discussed in this publication.