Published at: 6/21/2016 3:29:23 PM
We help you weigh up the pros and cons of building a brand new home versus buying an established property.
There’s no right or wrong answer when it comes to the choice between building your first home versus buying an existing property. It’s all about what’s right for you. We’ve put together a checklist to help you make the right decision.
There is no set rule as to which is cheaper – a new build or an existing home. It all depends on the size, style and location of the property.
With an established home, you can at least see exactly what your money is buying. It’s not always so clear cut when you’re building especially if you buy off the plan. Be sure to look for clauses that could let the developer vary the price on completion.
Outer suburbs tend to have more vacant land and this can make home sites more affordable to first home buyers. The downside is that local facilities like transport links, entertainment options and even shops and hospitals can be limited. Capital growth can also be slower in outer suburban areas.
A home that reflects you
Building a new property can mean a chance to tailor your home to your specifications as well as giving you the chance to select the fittings and finishes that you like.
With an existing home you’re buying the design, layout and even décor that suited the previous owner. Sure, you can always renovate – that’s one of the joys of home ownership, but it all comes at additional cost.
Potential stamp duty savings
Choosing to build a new home can mean pocketing savings on stamp duty especially if you buy off the plan or purchase vacant land that you build on later. That’s because duty is levied on the value of the land at the time of sale. If that land includes an existing home, you are likely to face higher stamp duty charges.
The First Home Owner Grant
In a number of states/territories, the First Home Owner Grant (FHOG) has been narrowed down so that it’s only available on newly built homes. As a first home buyer you could probably do with a financial helping hand, and the FHOG can be tempting. But make the decision that is based on your needs rather than the availability of the FHOG.
The decision you make can also impact the home loan that is right for your needs. Speaking with your ME Mobile Bank Manager at an early stage can give you certainty over how much you can afford to borrow, as well as giving you a firm idea of which loan is most appropriate for your first home no matter whether you build or buy an existing place.