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For the time being, it seems like Australia has stopped the spread and flattened the curve of COVID-19. Lockdowns and restrictions have been lifted, including the embargo on auctions and open houses, opening ways for potential investors and buyers.
Image Title: Building a Home
Alt. Image Title: House Construction
Image Description: Person working on a wooden frame
For the time being, it seems like Australia has stopped the spread and flattened the curve of COVID-19. Lockdowns and restrictions have been lifted, including the embargo on auctions and open houses, opening ways for potential investors and buyers.
Research from the Australian Bureau of Statistics shows that building approvals increased by 1.3% in March after the ban was lifted. To be fair, this was before Australia had seen the worst of the pandemic.
Australians around the country are hoping for routine life to resume once again in the upcoming months. However, you’re looking for a home, should you build one or buy one?
Until the sun goes down, we can make arguments for both sides. But to make the decision easy, we’ve tried to refine it to the key points.
When you build a home from the ground up, it usually means you’re involved from the get-go. Whether buying or finding the right piece of land, deciding the number of storeys, choosing a builder, deciding the number of bathrooms or bedrooms…you’re going to have several opportunities to personalize.
This is also one of the reasons the building industry is increasing with every passing day; customizations! If you have the necessary funds, you can even get a bowling alley inside your home with help from builders like Coral Homes. Moreover, choosing high-quality materials for the building process also ensures your home will require less maintenance in the long run.
If you’re buying a home for the first time, you may qualify for a concession; however, not many people are on this boat. When you build a home, you only pay stamp duty on the land and not on the property. To show you the difference it can make, let’s consider a case in Sydney.
Building on an average $459,000 land lot will mean you’ll have to pay a stamp duty of around $16,000. In comparison, if you bought a house in Sydney for the median price of $889,000, you’d have to pay a stamp duty of $35,000 (double of what you would’ve paid if you built a home).
A construction loan is supposed to assist a builder when accumulating the necessary funds for their home. Even though construction loans can be convenient when building a home, you’d see the downsides if you compared them to a normal loan.
More noticeably, they have a higher interest rate, meaning you’d have to pay way more than what you initially borrowed. Moreover, they also have a high fee which requires a large deposit.
Unless you’ve signed up with a builder who claims they can build your house in a week, chances are your house will take a lot of time. When you buy a home, you need to finalize the paperwork, get your finances in order, and you can move in. In contrast, a house that you build can take somewhere around six months to a year, depending on your specific needs.
This will also mean that you’ll have to rent a dwelling elsewhere while the build gets completed.
As the Australian population continues to grow, so does the number of houses being built. For those wanting to build a home, land lots for these purposes are drying up fast in regional areas and cities. However, when you buy an already built home, you choose the location you want without being restricted by the property’s size.
It’s true that when you build a home, you get to personalize most of it, but things rarely turn out the way you want them to. There are often mistakes, hitches, and miscommunications that turn your gold-plated sink into a copper bathtub.
When you buy a home, you know what to expect since you’ve already seen the house you’re moving into. It would help if you also got an inspector to look at the house before you move in.
If you’re buying a home for the first time, it’s less likely your state’s government is going to help you with the purchase. Most states only provide grants to people building a new home.
If you’re buying a pre-built house, there are chances people have lived in it before you. This means you’ll have to deal with some wear and tear. With time, this will increase, and these damages will become much more apparent (more common with older properties in Queensland).
The decision of buying vs. building a house in Australia is innately personal. Whatever your decision is, ensure you understand the cost involved with the process.
