Finding a house that you can turn into a home might make you wonder if it is cheaper to build or buy a house. There are pro’s and con’s that come with both. In the end, you would want to weigh the factors that come with it, and whether either option will match your needs.
What does it cost to build a dream?
The main factor that will affect you is how many paper lobsters you have loaded in your bank account to finance your need to build. It will also be determined by whether you have the patience as building a house from scratch takes time. There will be upfront costs that you will have to factor in such as the lot price, landscaping, and energy efficiency.
At a glance
The appeal of building your own home can be:
- The First Home Owners Grants (FHOGs) that are available for the construction of new homes that can offset the costs of stamp duty and finishing costs that add an additional 15 – 25% of total costs.
- You can build it to your own taste and needs.
- Lower ongoing maintenance and energy costs.
- There is less competition to buy land.
Building a house is not as simple as buying a plot of land and planting the first brick to get it up and going. There is more to it. Depending on where you choose to build the median price you’ll pay for a vacant block of land varies from ay region in Australia. HIA and Corelogic released some recent data showing that the estimated median construction costs. When combined with the estimated median construction costs for a three-bedroom brick veneer home on a level block of land with a medium finish quality the price increases:
|Median Lot Price||Maximum estimated construction costs||Total|
Source: HIA/Corelogic ‘Median Lot value’ taken from the September quarter 2017
The cost of Stamp duty
When calculating the total cost that comes with your house, you will have to keep the stamp duty that comes with it in mind. The cost for stamp duty will differ depending on where you decide to plant your roots. The cost can be reduced for first home buyers through a concession on your stamp duty. However, this will depend on the state or territory you live in.
It could take thousands of dollars and years to get your yard into what you desire, which is a factor that you will have to think about when choosing to build. The average cost of landscaping in terms of adding drought proof plants in Australia could cost you anything from $12.99 for 120mm to $29.99 for 180mm.
New homes usually take the cup for beating establish homes when it comes to energy efficiency. With their new designs of being energy efficient by using the natural elements, and clever use of building material to power the house they can consume 21% less than older homes. This will be a welcomed factor if you are looking to cut your energy bill and a major selling point when you are looking to resell your home.
The cost of buying a dream
Buying a house might take you 30 days to finalise the paper work and have you moving in, but there is more competition.
At a glance
- It has a larger land parcel
- Landscaping is already established for you
- It is closer to the CBD and established infrastructure
- It can have investment potential
The cost of buying a house
Looking at the median house price, Domain released a report that shows how much you could be forking out for an established house.
|Median House price|
|Brisbane||$850,000 – $900,000|
Source: Domain group
An established home beats a newly constructed house when it comes to the landscaping. The land on which the house sits on is usually bigger. The setup for a lush landscape usually takes a few fixtures to configure and turn into your desired view with little cost when compared to a newly built house.
Buying a house can come with the fact that most of the buildings are based on old designs that were not so energy friendly, which means you could be paying a lot on your energy bill. There is also the factor of maintenance costs that come with an established home which can cost you. In this case, it would be advisable to set up a maintenance budget that won’t burn a hole in your pockets.
It will all boil down to what you need and whether it matches your budget. If you are looking for an extra financial injection to help you attain your home, then