Shop around for a spec house or new home build, and you’d get wide-ranging quotes even for a same-size residence. In one estimate, the average construction cost for a 4-bedroom place was in the range of $1,300–$3,900+ per square metre.
How much the house will eventually cost depends on the construction materials used, the level of finish, and labour. All these elements, plus more, are at play when you pick between a spec house and a new build.
But first, what’s a spec house? And how much does it cost to build a spec house vs. a new build?
Let’s dig in, and from this exercise, learn, too, about their pros and cons.
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What’s a spec house?
Builders use the term spec house meaning as short for speculative house construction. They build this residence on the speculation that it’d sell easily for a profit.
A spec house is usually under construction or for completion at the time of purchase. This way, it’s the builder, not the buyer, who chose the home’s design, fittings, and finishes.
Sometimes, a spec house even comes already complete with furnishings that its builder picked. This is why spec houses are also often called turnkey residences .
What’s a new home build?
A new home build leans more towards the direct involvement of the buyers. They provide input on the architectural style of the house and its construction materials.
Typically, buyers of a new build will approach a builder and present an architectural plan for the residence they want. The buyers will seek the builder’s advice, but they have the final say on the new build’s design.
New builds are, therefore, more customised than spec homes. The elements surrounding this process of customisation highlight the respective advantages and disadvantages of spec homes and new builds.
Check out the pros and cons of both below to help you pick the right buying path for your dream home.
Spec house pros
- Cost-saving on professional fees. Buying a spec house saves you money paid to an architect and an interior designer. You don’t have to spend time consulting these professionals too.
- Value-for-money furnishings. Spec home builders have access to bulk discounts on high-end furnishings like European appliances. Significant savings on these items are passed on to you when you buy a spec house.
- Simpler financing. Progress payments and complicated lending structures are avoided. Settlement of all payments can be done upon the completion of the spec house.
- Faster move-in. A builder of a spec house already has a timetable set for the completion of the residence. You can easily work on your move-in based on this schedule.
Spec house cons
- Restricted personalisation. You will have limited elbow room to put in your design preferences in a spec house. Its construction elements are already optimised and adjusting them to your taste may entail an added cost.
- Cookie-cutter look. A spec house is patterned after a model home design that a builder uses in its other projects. It will have many replicas which may turn you off if a stand-out residence is what you want.
- Compatibility concern. The spec house design might have features that you don’t like or need. You may not also be comfortable with its location.
- Fast turnover. A spec house in a prime location can move fast on the market. You may lose the chance to buy one if a builder finds a buyer who can pay the cash at once.
Pros of new builds
- Customisation. Your ideas and style will be the basis for the plan and design of your new residence. Unlike in a spec house, you can tailor-fit your needs and preferences right from the very start of the conceptualisation of the new build.
- Professional access. You can draw synergy from your architect and builder to come up with the home of your dreams. Both are also likely to have a rich library of base plans for you to choose from.
- Budget-efficiency. You can budget more efficiently, as only the features important to you will be included in the new build. It’s your call on the types and number of rooms which will go into the design, as well as its finishes and furnishings.
- Quality control. You have better control over the construction materials for a new build. You can monitor their quality, as well as their cost, for value-for-money considerations.
Cons of new builds
- Affordability issue. New builds are typically more expensive than spec houses. Besides construction costs, you will incur expenses in planning as well as in securing government permits.
- Time-consuming. It will take more time before you can move into a new build. Many factors can delay its construction, such as plan adjustments, weather, and availability of resources.
- Location hunting. Looking for a location that specifically meets your requirements can be difficult. You’ll be essentially competing with big builders of spec houses in finding a suitable location for a new build.
Summing it up, your personal preferences, as well as your budget, will largely dictate whether to choose a spec house or a new build. Both have certain advantages and disadvantages which you need to closely examine.
Deciding which one comes up weightier is crucial, as building a home is a huge investment for your future. Professional advice from an experienced builder should help you make an educated decision on which one is best for your circumstances.
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