Building a home versus buying a home, a question that has been and will be debated for years to come. Whilst there may be a difference of opinions amongst the general public, there are some solid facts for each side which may help you decide which avenue is best to travel down. So read on as we hammer down on the pros, cons and extra facts surrounding building a home compared to buying a home.
Regardless of whether you decide to build or buy a home, one thing that applies for both scenarios and most often determines which path you decide to take is money. In saying this, it is fair to say that to answer the main question ‘Building a Home Versus Buying a Home?’, most people will first address the question of whether it is cheaper to build or buy a home. So, which one is it? Often people are quick to assume that building a home is the more expensive option, but this is not necessarily the case (especially with Lofty Building Group by your side). Of course, in building a home you have the potential to build an extravagant home, but you also have the option to build a home that suits your personal budget, whatever that may be. In saying this, it can be hard to give a definitive price to compare the 2 because of the sheer number of factors that can influence their final cost e.g., size, slope of block, location, materials used, etc. Although…what we can provide you with are some stable figures outlining the median costs of building compared to the median costs of buying a home. When looking at the table below, you can clearly see that in 5 out of 6 cities across Australia, building a home is substantially cheaper compared to buying a home, with a big contributing factor being the price of stamp duty, but what actually is stamp duty? Well Stamp Duty is in fact quite a substantial fee that home buyers will have to face when purchasing a property. It is essentially a government tax and varies in price depending on location and value of a property.
With such a strong focus on the financial aspect of building or buying a home, one can often forget about the other pros and cons associated with each option. So let us outline them for you.
PROS OF BUILDING A HOME
- You have complete creative control
From land choice and design to every finishing touch; if you decide to build a home, you have the ability to cater everything to your personal wants and needs. Whether it be a design from scratch or a design that already exists, you can tweak elements to suit you and your lifestyle perfectly. If you build, everything is up to you including the number of bedrooms, bathrooms, living room layout, lighting, handles, style of bricks, roofing, flooring and absolutely everything else you can think of.
- Save on stamp duty
In most cases, when you buy a home you pay stamp duty on the purchase price, whereas when you build a home you often only need to pay stamp duty on the land price. Voila, a huge saving.
- Investment opportunity
Whether your intention is to live in the home or to rent it out, regardless of the fact, it still counts as an investment. Keep it as an asset or sell it off later down the track, homes often go up in price, especially in highly sought after or up and coming suburbs.
- It is ultimately cheaper to build!
As discussed earlier, it is evidently cheaper to build, PLUS the home will be perfectly designed by you, for you. Know that when you build, you are paying for things that you genuinely want, instead of things that an existing house already has (things that you may not even necessarily want).
CONS OF BUILDING A HOME
- Building a home takes time
The average construction period expected for a standard suburban home can take on average 9-12 months. In addition to this, delays can occur due to weather conditions, materials not arriving on time and so on, therefore patience is a virtue.
- Unexpected costs
It is not uncommon for unexpected or variation costs to pop up during a home build e.g., earthworks and drainage. Our tip is to have some budget reserved for the unexpected.
- Easy to get carried away with ideas
It can be easy to get carried away with house inspiration ideas, yet it is important to be realistic. Working with a building group like Lofty will ensure your budget is followed, yet you still are able to include elements that you desire into your home.
PROS OF BUYING A HOME
- Quicker move in time
The main pro of buying a home is the speedy turnover from settlement to moving in, with no need to worry about construction. You must weigh up what is more important to you, a perfect home that you must wait for or one that is not quite perfect, yet you get to move in quickly.
- Everything comes complete
When buying a home of course there may be things you want to change, but overall, the home is complete. From flooring and roofing to landscaping, when buying a home this is something you will not have to worry about completing (unless you plan on renovating of course!).
CONS OF BUYING A HOME
- Interior improvements may be necessary
Of course, nothing is perfect, but when people buy a home, there is often something on the interior that they wish to change e.g., wall colour, flooring, etc. The bottom line is that improvements = another cost involved.
- Not being 100% satisfied
When people purchase a home, they will often overlook elements they do not like simply because it is difficult to find the perfect home without building. Although if you are spending a large sum of money, you should be happy with every aspect of your home. Nothing is worth lowering your standards for.
So, there you have it, the pros, cons and everything in-between associated with building a home versus buying a home. Of course, a buyer’s personal priorities will play into what option suits them best, but you cannot deny the facts. Whilst there are pros and cons of each, the main aspect that makes building a home the better option is in terms of its financial benefits. You get to design and build exactly what you want, without having to compromise the way you would if you were to buy an already established home that was quite frankly made for someone else.