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Building vs Buying: What you need to consider

Whether it be your first home or next home, there are many factors to weigh up in deciding if buying an established house is the way to go or building a new house is your preferred option. What you choose will depend on your individual needs and circumstance, but there are factors that are worth considering when making that decision.

Pros of Building:

Putting your stamp on it
Constructing your own home means you are involved in the process, from choosing the land, selecting a builder, and deciding on the plans. If you have unique requirements due to your hobbies, work or even considerations like mobility issues, these requirements may be tailored to suit your needs.

Government Grants
In Western Australia, if you are a first home buyer constructing a new residence, you may qualify for the $10,000 First Home Buyers Grant as well as the stamp duty concession on land.

When you have built a new home, you are not likely to be immediately burdened with ongoing maintenance issues, at least in the short to medium term. Whereas with an established property you are not necessarily privy to how the fittings and fixtures have been maintained and what work awaits you.

Cons of Building

Depending on your equity and servicing position, you may be limited as to what land options are available, with new housing estates generally on the outer metropolitan area. Alternatively, blocks of land closer to the city may be smaller than those in the outer suburbs, thereby placing limitations on your build.

Building a home takes time and that requires patience. If time is not on your side due to an expanding family or other factors, then building may not be logistically viable. Additionally, the time it takes to deliver your home may be hindered by delays such as weather or a labour or materials shortage.

A Contingency Plan
When you are building you also need a place to live during construction, so it may mean renting or moving in with family, depending on what financial resources are at your disposal. Paying rent or an existing mortgage may not be financially viable or there may not be a friend of family member that can provide temporary accommodation.

Pros of Buying

Its Conveniently Quicker
Once you have made the decision to purchase a home it is not unreasonable to expect to be in your new place within a matter of a few months, even weeks. Assuming you have your financial ducks in a row, and you know exactly what you are looking for, the process may be completed much sooner than if you were to build.

As vacant land to build on is limited to usually specific areas, your options are likely to increase if you choose an established property. Even if the home is not exactly what you want, you can always make changes to suit your needs or aesthetic in time.

You Can See What You are Getting
If you are not great at visualizing from plans or colour swatches, building may seem somewhat daunting. Seeing a property and being able to walk through it will give you an accurate feeling for its spaces and how they flow not to mention the emotional tug some properties have on potential buyers.

Cons of Buying

Wear and Tear
An established property will have been lived in so you can expect that some areas may either show it or will require maintenance. Furthermore, you will not necessarily know to what standard fixtures and fittings have been maintained and the quality of work done, especially if a property has been upgraded simply for the purpose of selling.

Higher Government Fees
When constructing a home, stamp duty is payable on the land alone, whereas stamp duty is payable on the entire value of the property when buying an established home. As a first home buyer you also may be eligible for stamp duty exemption on an established purchase but not qualify for potential first home buyer grants available on construction.

Specific Features Not Available
If a particular space is needed to accommodate a hobby or to operate a business from, it may be limiting when finding an established home. A car enthusiast may need more than a double garage to house their collection, a musician may need a soundproof studio or a large family may want more than the standard three or four bedrooms. Building can ensure your needs are met rather than settling for something not quite right.

There are many factors to weigh up when choosing a property. Whether it be your first or next home, it’s a decision only you and your family can make. When the time comes, the Blackburne Mortgage Broking team will be on hand to find a great home loan solution. Even if it’s just a pipe dream or if you are ready to pull the trigger, contact us anytime for all the information you need.

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Paul Prindiville


0438 196 695