It is fascinating how this changes over time. 15 years ago you were a lot better off to build than buy however it seems at the moment you are better to buy than build.
It really comes down to supply of land. It’s scarce now so the values are inflated as a percentage of existing homes.
Land at the moment in sought after areas doesn’t come below $200,000, then you add in building even a modest home and you are staring down the barrel of $600,000 in total. The new legislative requirements for new homes including OHS requirements for scaffolding and other precautions as well as the new rules for energy efficiency mean building a new house is a lot more expensive than it used to be.
There are pros and cons to both methods. If you are fussy like me then building can often seem better as you get exactly what you want.
Building advantages; you only pay stamp duty on purchasing the block not the whole amount, you know the quality of all the products involved and have a say in exactly the colour schemes and personalised touches. There are costs involved with council approval and making sure you abide by the stringent OHS guidelines and the time frames may not suit you.
However if you buy an existing house there are the benefits of all of the landscaping has been done and paid for, you don’t have to wait for the builders, you can see exactly how it has turned out and you know it is solid and has no major problems (well as long as you get a good building inspection completed). There is also the major advantage of location. Generally all of the exceptional locations have already been built on so you need to buy an existing house to access.
The main question comes down to budget and the bang you are getting for your buck in regards to where you want to live.
If you have any questions or wish to work through purchasing or building a house options please let the staff at Ritchie Advice know we would be more than happy to sit down and work with you to determine exactly how you will achieve your dream home.
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided in this article is general advice only.
Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.
Erin Gourlay
