For most of us, buying a home is the single largest investment of our lives. It’s a massive milestone that often requires years of financial planning and saving. Once you decide to shop around the industry for a suitable place to call home you might get this question a lot: are you buying a house or building one from scratch?
The truth is, buying or building a house both come with pros and cons. While both options offer significant benefits, each buyer must assess their circumstances and choose the best solution that fits their lifestyle and finances.
Let’s dive in and have a look at both sides.
Buying a house
Pro: Mortgage builds equity
The down payment plus the principal amount you have paid off your mortgage will equal the percentage of ownership you have in your home. Your property is an asset, also called equity.
Pro: It’s often a faster and a more fluid process
Buying a home and settling in is often faster than planning and building a house. Once your lender approves your application, you can sign your conditional agreement/contract within 30 days. This also allows you to move into your new home in less than 60 days, granted no renovations are needed.
Con: It could be more expensive
Depending on where you live, building a house can be cheaper than buying an existing one. More and more home buyers near Australian CBDs are opting to build homes due to the ever-increasing prices of existing dwellings.
Building a house
Pros: Customisation and creative control
Reality and governing authorities permitting, you can finally build your dream house the way you always wanted it. The location of the fireplace, kitchen, verandah; you get to decide. This reason alone encourages many home buyers to build their homes vs buy existing properties. If you do not like any existing houses on the current market, the best option is to contact a reputed construction company or a contractor.
Pros: More energy efficient and eco-friendly
Due to arising regulations, construction companies have adapted energy efficient and environmentally friendly practices to reduce energy costs and save the planet in the long run. Utilising responsible building practices or “passive design” techniques like natural ventilation, PV panels with battery backup and greywater systems will also appreciate your property in value.
Con: Building takes time
The Australian Housing and Urban Research Institute (AHURI) says it can take up to 7.5 months on average to construct a new home from scratch. Due to the timeframe, the buyer should factor how much it will cost them to live somewhere else while they build. Added to that changes made midway through construction can incur additional costs and time.
However, the above risk can be mitigated by working with a reputable builder and having a proper contract in place. Take time to research and understand not only your wants and needs but also, the contractors and lenders.
At Lindona, we take the time to understand our client’s individual needs. We help you find a home design that suits you and your lifestyle, timeframe and budget. When you decide to build your home with Lindona, we’ll work closely with you throughout each stage of building your new home with complete transparency.