Building versus buying property: Everything you need to know
Tue April 11, 2017
For many buyers, purchasing a home doesn't mean the end of the process. In lots of cases, there's further work to be done on renovating the house to fit in with the particular needs of the new owners. This could be a kitchen alteration, or the addition of childproofing elements, but either way the costs can quickly rack up. One way to avoid this lengthy and expensive step is to simply build a home from scratch, but will that really work out cheaper?
In this article, we'll take a look at the pros and cons of building a brand new home or buying off a plan versus purchasing an established property.
The biggest benefit of building over buying is that owners can have far more control over their property.
Building or buying off the plan
First and foremost, buying land to build on is usually much cheaper than purchasing a property that's ready to be lived in. There are, of course, exceptions to this rule, such as land in prime inner-city suburbs, but in general the initial purchase will be significantly cheaper. This is especially true for first home buyers, who have access to some very enticing grants from the NSW government when buying land or a brand new home. Under the current regulations, first time buyers making a purchase of under $750,000 can receive a grant of $10,000. In addition, depending on the price of the property, it may be possible to get a concession or even an exemption from stamp duty.
In terms of where land available for purchase is located, inner-city lots are quite rare and come at a premium price. Instead, it's much more affordable to go a little further out, as long as the location is close to public transport options and all the essential amenities you require.
Cost aside, the biggest benefit of building over buying is that owners can have far more control over their property. Custom touches could be small (fittings and furnishing) or far more elaborate (layouts and room size). Even when buying off a plan, many developers will be happy to accommodate certain requests from purchasers in order to secure a quick sale.
Buying an established property
While building comes with a lot of benefits, there are a few key drawbacks that purchasers should consider. Firstly, there's the additional time that you'll have to wait before being able to move in. This means more money going towards rent payments while you wait for construction to be completed, which can delay mortgage payments.
Many buyers feel that brand new developments can lack the character of older more established homes.
There's also the issues of 'character' to consider. Many buyers feel that brand new developments can lack the character of older more established homes, which have a cosy, lived-in feel that is hard to replicate. Even gardens or lawns, which may not be a high priority when looking at properties, can take a lot of time to establish, but contribute hugely to the quality of life you'll enjoy at an older home that's been lovingly maintained over the years.
With the shortage of land in inner-city suburbs. established homes are usually much closer to the CBD than brand new developments. This may or may not be a big deal depending on each individual buyer, but it's worth keeping in mind that building from scratch will limit the suburbs you have to choose from.
Ultimately, the decision of whether to buy or build comes down almost entirely to each individual buyer. Work out what's important to you, and what type of property you really want and need. If you need any assistance working out the best option, contact the team at Laing+Simmons for more information.