There are lots of decisions to make when buying a house. But, the very first thing you need to think about is whether you’re going to build a new home or buy an existing property and do a knock down rebuild project. Building vs buying is a big choice, and it can make a major difference to your budget and lifestyle. Each type of property comes with its own pros and cons, and it’s your job to weigh up the differences and decide which option is right for your family. In this article, we’ll go over some of the things you need to consider when deciding whether you should buy or build your first home.
1. Finding the Right Location
Location is one of the biggest factors when buying a new home. The location you choose impacts the price, and it also affects your access to friends, family, schools, amenities and other lifestyle features.
When you buy an existing home, you will have more freedom to choose a property in an established suburb that’s closer to schools, shops and other amenities. That’s great for your family and lifestyle needs, and it can also shorten your commute to work. On the other hand, most new home builds occur in developments, which tend to be located in up-and-coming outer suburbs. While it’s possible to build a new home in an established suburb, the price of vacant land rises sharply in popular areas, so you need to factor in the additional cost.
2. Your Budget
Budget is a major consideration for all home buyers. According to the latest property data, it’s currently cheaper to build a new home in most of Australia’s capital cities.
The median price of existing homes vs new builds is as follows:
|Existing Home||New Build (House + Land)|
There’s no simple way to estimate how much a newly built home will actually cost. The final price varies based on the size, style, location, building company, materials availability and the level of fit and finish. While median prices can give you a good idea of the cost of a house and land package, you’ll need to talk to your builder for a quote on your project.
3. Creative Freedom
There’s nothing quite like living in a home you designed yourself. Building a new home gives you complete creative freedom to design spaces that perfectly support your family and lifestyle. If you need additional bedrooms, office space, specialty entertaining areas or a spectacular master suite, a custom home build offers everything you’re looking for.
Buying an existing home is a bigger compromise. You’re locked into the original floorplan, and the cost of renovations adds up quickly if you want to update core spaces like kitchens and bathrooms.
Getting into a new home isn’t as simple as picking one you like and shaking hands. The process can take anywhere from a few weeks to 12 months, depending on whether you decide to buy or build. As a rule of thumb, it takes anywhere between 6-12 months to construct a new home. That doesn’t include the time you spend researching builders, finding the perfect block of land and designing your ideal home. On the other hand, it may only take you 2-3 months to buy an existing home, but the process can be drawn out if you are struggling to find the perfect property.
5. Stamp Duty Concessions
Stamp Duty (also called Transfer Duty) is a one-off tax you pay when you buy a house. It’s calculated as a percentage of the purchase price, so it can be a major expense. When you buy an existing home, you pay stamp duty on the entire value of the home. When you build a new home, you pay stamp duty on the cost of the land, but not on the price of the actual build. That can save you tens of thousands of dollars!
We can use Australia’s median house prices to estimate the stamp duty you’d be required to pay when buying an existing home:
|Median House Price||Estimated Stamp Duty|
Depending on where you buy and whether you’re buying a first home, investment or off-the-plan property, you may be entitled to a variety of stamp duty concessions. That can make a small difference, but you’ll still pay significantly more stamp duty than you would for a newly built home.
6. Sustainability and Energy Consumption
If a sustainable home is high on your priority list then you aren’t alone. Almost 50% of the population is on the lookout for eco-conscious homes built with sustainable materials and energy-efficient features. That can be a bit of an issue if you’re buying an existing property.
Older houses rarely feature the sustainable materials and energy-saving design that modern homes are known for. If you buy an existing property, chances are you won’t benefit from things like recycled materials, passive heating and cooling, double glazing and energy-efficient appliances. It’s possible to add some of these features to an older home, but the property’s layout limits what you can achieve.
On the other hand, a newly built home can incorporate as many sustainability features as you want! Sustainable building practices are always advancing, and building a new home is the best way to take advantage of passive heating, solar power, house batteries, efficient appliances, natural light and eco-conscious design.
Build a Home that Supports Every Part of Your Life with McCarthy Homes!
Building a house vs buying an existing home is one of the biggest decisions you’ll ever need to make. Your choice can have a major impact on your budget and lifestyle, and it can also impact things like long-term capital growth. If sustainability, creative freedom and lifestyle are at the top of your wish list, it’s time to start a conversation with McCarthy Homes! McCarthy Homes is a custom home builder that works across South East Queensland.
We specialise in crafting incredible homes that feature timeless design, quality finishes and the personal touches your lifestyle needs. You can explore our home designs on our website, or contact our team to discuss building a new home with McCarthy!