It’s an age-old question – should you buy an established home or build a new one?
The answer is… well, it depends. There’s plenty to consider before you make your choice including the price, location and style of home you’ve got in mind.
To make this dilemma a little easier, we’ve weighed up the pros and cons of each.
Buying an established house:
One of the biggest advantages of buying an established property is that you’ll be able to cast your ‘search net’ further. Established homes are generally in existing neighbourhoods close to schools and public transport. On the other hand, vacant lots close to the city are hard to find and many new developments are built in outer suburbs.
When you buy an established home, you can usually move in within a six-week timeframe. As opposed to the much longer timeline you need to factor in when building. You will also have the benefit of being able to visit the house at open inspections and seeing the property in the flesh, as opposed to potentially just seeing plans on paper.
By buying an existing home, you can miss out on cost reductions available to those who build. For example, when you build, you only pay stamp duty on the land value (and not the house value). In South Australia, the $15,000 First Home Owners Grant is only available to those who buy a brand new property or build.
You’ll also be stuck with your house’s current design (unless you plan to renovate, but then you’ll need plenty of extra money set aside). It might also mean that you need to replace outdated features, such as heating and cooling that are not energy efficient or cabling that’s not suitable for today’s technology.
Building a new home
Building lets you to design your home to suit you and your lifestyle. You can choose your own features, finishes and floorplan. You might not be able to go as grand as these designs
, but you’ll still be able to create your home in your own style from scratch.
Building also means you may be eligible for the First Home Owners Grant and stamp duty discounts outlined above and available here
. If you meet the eligible criteria of the First Home Owners Grant and HomeStart’s Graduate Loan, you can also reduce your upfront costs by buying a house and land package with one of HomeStart’s participating builders. This can reduce your deposit requirement to as little as $3000. HomeStart’s construction loan option also allows you to defer any loan repayments for up to nine months or until construction is complete, whichever occurs first. This way, you don’t have to cover both rent and mortgage repayments.
Don’t be fooled by reality TV shows that suggest building – or renovating – can happen within a matter of weeks. By the time you factor in council approvals, design plans and the construction time, building your own home is a lengthy process. And while most builders offer a fixed price contract option that includes a guaranteed build time, you’ll also need to keep in mind that unexpected delays, can push out waiting times even further.
The construction process can also add a layer of complexity to the buying process. There are more terms and processes to get your head around. Chat to a few different local builders who can explain the processes – and costs – involved. Once you understand these costs, you can compare them with existing properties by looking up established real estate prices online.
Whichever option you’re leaning towards, don’t be afraid to ask questions. There’s no such thing as a stupid question when it comes to one of the biggest life decisions you’ll ever make. So give HomeStart a call and find out how you could get into your own home sooner.