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Build or buy: Weighing up the pros and cons


If you’re on the hunt for the perfect home, you might be trying to decide between building your own home or buying an established home. We take you through some of the pros and cons of building and buying, so you can weigh up the options and make the decision that suits you.

Pros and cons of building your own house

Building your own home can be a great way to get the home you’ve always wanted but there are disadvantages that also need to be considered. 

Advantages of building

1. Great control over how your home is built

The biggest advantage of building your home is that you might be able to get as close to your dream home as possible, within the constraints of regulations and budget.

You could create the floor plan you want, choose fixtures and put your money towards the things you care about. For example, you could choose to install simpler light fittings so you can put more money towards getting a top of the range stovetop. Or choose to have an extra bathroom instead of a bedroom.

Find out more about the options available when building a home.

2. Save on stamp duty

As a general rule, when you buy a house, you pay stamp duty based on the value of both the land and the house. However, when you buy land to build a house, you only pay stamp duty based on the value of the land. This means you don’t have to pay stamp duty on the house you build, which could be a substantial saving.

3. Lower ongoing maintenance and energy costs

New properties generally come with a builder’s guarantee. How the guarantee works, how long it lasts and what it covers may be different depending on the state or territory where the property is located, so check this carefully to see if a guarantee is available and how it could protect you.

New properties are also probably more likely to be built to a higher energy efficient standard. This could mean lower running costs.

4. Benefit from grants

If you're buying your first home, the First Home Owner Grant could lead to substantial savings if you build.

Disadvantages of building

1. Time consuming

Not only will you have to wait months or years for your new home to be built, building requires greater involvement from you over a longer period of time. There are a multitude of decisions that you would need to make over the course of construction that could take up a significant amount of your time.

2. Project delays

Not only will you have to wait months or years for your new home to be built, building requires greater involvement from you over a longer period of time. There are a multitude of decisions that you would need to make over the course of construction that could take up a significant amount of your time.

3. Unexpected costs

Making changes during the build and adding extras could see your budget spiral out of control. Even if you stick to the plan, there could be unexpected costs.  For example, the soil quality on your land might be difficult to work with, or the land might have a slope. You may want to consider setting aside a contingency budget or ensuring there is a buffer in your budget for delays and unexpected issues.

If you’re planning to buy land, there are some considerations that could affect whether or not you’ll be able to get a loan. Find out more about applying for a loan to buy land.

Pros and cons of buying an existing home

Advantages of buying

Just like building from scratch, buying an established property offers some advantages and disadvantages.

1. What you see is usually what you get

Things don’t always work out the way you expect when you build. However, when you buy an established home, it’s more obvious what you’re buying. A building and pest inspection as well as a property valuation could help you avoid any unexpected issues.

2. Establish infrastructure and amenities

More often than not, an existing home would be located in an established suburb, usually closer to existing amenities, like schools, public transport and other infrastructure.

Generally, vacant land and house and land packages are located in less established neighbourhoods. Unless you’re planning to buy an existing home, demolish and rebuild, you’re likely to be building in a developing suburb where you might have to wait a few years for facilities and infrastructure to be built.

Parks, trees and gardens might be lacking in a new estate. An established home is likely to have established landscaping, so you won’t have to build your garden from scratch, which can be costly and time-consuming.

3. Larger land size

New land lots can be smaller so you might get a larger land parcel with an established home. If a good-sized yard is important to you, established properties might offer better options.

4. Move in faster

You might be able to move into an established home as soon as 30 days after paying the deposit. For a new home, you’ll still have to wait for the home to be built.

Disadvantages of buying

1. Outdated design and features

While there are many advantages to buying an existing home, it can be a challenge to find a home with all the features you want. For example, older properties might only have one bathroom. There might be greater expense involved if you were to renovate an existing property to meet your needs and that’s something you might want to factor into the overall cost.

2. Higher maintenance costs

An older home has been lived in, sometimes for many years, which means wear and tear that you might have to bear the cost of. New homes can be built using newer, more sustainable materials and so are more likely to have a higher energy efficiency standard, potentially reducing ongoing energy bills and maintenance.

So should you build or buy?

Whether you decide to build or buy depends on what you’re looking for in a home and what’s most important to you. Thinking about what you need in a home, not just what you want, could help you make better decisions.

If you decide to build your home, you need to consider how you’re going to finance the build. Consider talking to an ANZ home loan specialist and applying for pre-approval. With pre-approval, you’ll know how much you could borrow, which makes it easier to budget when you’re speaking with a builder or developer.

Your next step

Find out more about how ANZ could help you when building a house.

Build or buy: Weighing up the pros and cons
Home Loans Specialist

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