Debating whether to build a house or buy an existing one? It’s a classic dilemma that many potential homeowners face. Both options come with their own set of advantages and drawbacks.
Here, we break down the pros and cons of building a new house to help you make an informed decision.
Table of Pros and Cons
| Pros | Cons |
|---|---|
| Everything is new and in perfect working order | Building a new home can be a lengthy process |
| Personalized design to match your specifications | New developments are often on the outskirts of cities |
| Modern conveniences and energy efficiency | May lack established facilities and community |
| Environmentally friendly and health-safe materials | Ongoing construction noise in new estates |
| Access to financial incentives and grants | New builds can be “cookie cutter” and lack character |
| Reduced stamp duty and new home warranty | Smaller land sizes leading to smaller rooms and backyards |
| No need for immediate repairs or renovations | Hidden costs associated with site preparation and extras |
Advantages of Building a New House
A Blank Canvas and New Everything
One of the biggest advantages of building a new house is that everything is new. You won’t need to worry about previous owners’ maintenance habits or unexpected repair costs.
This gives you peace of mind knowing that everything is in perfect working order.
As everything is new, the buyer has the assurance that everything should be of a good quality and in perfect working order.
Personalized Design
Building your own home means you can design it exactly to your specifications. Everything can be tailored to suit your needs, from the floor plan to the fixtures. This is a major draw for those who want a home that perfectly matches their lifestyle and preferences
Speaking of floor plans, those in newer homes are often more practical and liveable than those in older homes.
And don’t forget the luxuries and modern conveniences more commonly found in new homes. You could even incorporate elements of home automation if you wish to set your home up for the future.
Environmental and Health Benefits
Newer homes are generally more energy efficient, built with sustainability in mind and with environmentally friendly, sophisticated materials.
This could go some way in reducing energy costs down the line, if it is built with solar panels or has modern insulation, for example.
Similarly, by building new the buyer won’t have to worry about the toxins that can be found in older properties such as lead paint or asbestos.
Financial Incentives
New home builders have access to a number of incentives, including the first home owners’ grant (which applies to new builds only in most Australian states), the security of new home warranty and reduced stamp duty, as the tax will apply to the land only if there is no property on it when purchased.
There are also cost savings to be made in some circumstances if the owner wishes to purchase a property off the plan.
And while building a new home can be a long process, a positive for owners is that they don’t have to wait for current owners or tenants to move out before they can move in.
Positives for investment
In terms of investment potential, it goes both ways. A new property will give owners access to the full depreciation deductions available and may attract a higher quality of tenant, who will pay more for the luxury touches more common in newer homes.
Disadvantages of Building a New House
A Drawn-Out Process
One common complaint about building a new house is the time it takes. The process can be lengthy and is often stretched out even further by hold-ups, mistakes, or scheduling conflicts with various tradespeople.
This means that building your own house requires a lot of patience and planning.
Location, location
Location can also prove an issue – a lot of new developments are often on the outskirts of cities and not in central locations.
Furthermore, if it is in a new suburb there may not be established facilities – or even a community- for several years to come.
In new estates, owners may also have to put up with noise from ongoing construction work for years to come.
Less Character and Space
Another common downside is that some new builds can be a bit “cookie cutter” and lack the character and originality of an older build.
Furthermore when you build new, you won’t have the established gardens and landscaping you’ll find in an established property, if that’s something that is important to you.
While the floor plan and design of new homes may be constantly improving, the size of the land they are on is decreasing.
New houses are typically now built on smaller lots than they used to be, due to rising land prices. This in turn generally means smaller rooms and backyards.
Hidden Costs and Uncertainty
And while there may be cost savings, those building new properties often find there are hidden costs which they may not have accounted for.
This could be associated site costs, landscaping or paying for extras that are not in their builder’s list of standard inclusions.
There’s also a lack of certainly which can add stress and an element of risk to a new home build.
As there is no property to physically inspect, the buyer must place all their trust in the property plans and builder and they may not know exactly what they’re getting until it is complete.
Investment Drawbacks
Finally, in terms of investment potential, there can be some significant drawbacks buyers and investors should consider. If it’s not in a central location, this could lower the value of the property.
Furthermore there mightn’t be as good potential for capital growth in a new build.
In an older or established home, you can often generate more capital growth by making a few updates and renovations, which can give owners notable returns.
In a new development however, where all other buildings are of a similar standard and no updates are required, this gain can be hard to create.
There are pros and cons to each approach and buyers should carefully weigh up both options when deciding what the best choice is for them.
Weighing the Pros and Cons of Building vs Buying an Existing Home
When deciding whether to build a house or buy an existing home, it’s important to weigh the pros and cons of each option carefully. Here’s a detailed comparison to help you make the best choice.
Pros of Building a New House
- Customization: You can design your home to your exact specifications, ensuring it meets all your needs and preferences.
- Modern Amenities: New builds come with the latest technology and energy-efficient materials, which can reduce long-term costs.
- No Immediate Repairs: Everything is new, so there should be no need for repairs or renovations right away.
- Financial Incentives: Various government schemes, like the First Home Owner Grant, are available for new builds.
Cons of Building a New House
- Time-Consuming: The process of building a house can take many months, with potential delays along the way.
- Location: New builds are often in less central areas, which can be less convenient.
- Hidden Costs: Unexpected expenses can arise during the building process, increasing the overall cost.
- Construction Noise: Living in a new development often means dealing with ongoing construction noise for an extended period.
Pros of Buying an Existing Home
- Established Neighborhoods: Existing homes are usually located in established areas with amenities and community services.
- Character and Charm: Older homes often have unique architectural details and mature landscaping.
- Immediate Availability: You can move in as soon as the sale is completed, without waiting for construction to finish.
- Potential for Renovation: You can often increase the value of an older home through renovations and updates.
Cons of Buying an Existing Home
- Potential Repairs: Older homes may require immediate repairs or renovations, which can be costly.
- Less Energy-Efficient: Existing homes may not have the latest energy-efficient materials or technology, leading to higher utility bills.
- Limited Customization: While you can renovate, you’re often limited by the existing structure and layout.
Making the Decision: Build or Buy?
Deciding whether to build a new house or buy an existing home depends on your personal circumstances and priorities. Consider factors such as budget, timeline, desired location, and willingness to deal with potential inconveniences.
If you prioritize having a home tailored to your exact needs with modern features, building a new home might be the best choice.
However, if you prefer a quicker move-in process and enjoy the charm of older homes in established neighborhoods, buying an existing home could be more suitable.
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FAQs on ‘The Pros & Cons of Building a New House’
Is it cheaper to buy or build a house in Australia?
Building a house is generally less expensive than purchasing an existing home in Australia, given the complexities of the housing market.
How much does it cost to build a new house in Australia?
As of April 2022, the average cost to build a new house in Australia is approximately $473,000, according to the Australian Bureau of Statistics.
How long does it take to build a new home in Australia?
Building a new home in Australia typically takes six to twelve months, though more complex constructions can exceed a year.
Can I legally build my own house in Australia?
Yes, you can legally build your own house in Australia if you obtain an owner-builder permit. This is required for supervising or conducting building work valued over $10,000.
