Need help to decide between buying or building a home? You wouldn’t be the first or the last. This is a hard decision for many, as the right choice depends on your needs and timeline. Building allows for a lot of customisations but takes more time. Buying is faster but offers less flexibility. This is a guide to help you choose.
A professional service, such as a property valuation from an expert Perth property valuer, can provide extra guidance and key information.
Buying or building a home is a major investment, so take the time to make an informed decision. Thoroughly weigh your requirements, budget, and timeline.
Your home is a huge asset and your early buying decisions can affect your lifestyle for years. But don’t stress; the right information will set you on the right track.
Is it Cheaper to Build or Buy?
Cost is a huge factor in deciding which option is best for you. Your plans for the property, financial situation, and eligibility for grants and concessions all affect whether one option is more affordable than another. There are also many other costs to consider, including a mortgage, insurance, renovations, and taxes. Here is what you need to know about some of the most crucial considerations:
First homeowner’s grant
In Western Australia, the first home owner grant (FHOG) applies to buying and building. Of course, this will need to be your first residential property in Australia. If you are eligible, this grant can make either option more affordable.
Stamp duty, or transfer duty as it is known here in Perth, is a tax paid on the transfer or purchase of property. If you are acquiring the property in a transaction that is not dutiable, such as transferring a residence to your spouse or partner. To help with paying the right amount, a stamp duty valuation will accurately determine market value.
Both building a home from the ground up and buying a ready-made home can come with unexpected costs. Outside of taxes, you may need to pay an assortment of fees, including legal and realty fees.
Of course, the likelihood of added costs and fees is much higher when building, especially if the project experiences delays. Renovators may share the same kind of added stress on their wallets if hazards or other issues are discovered during renovation.
In both cases, be sure to budget for the unexpected.
The Pros and Cons of Buying a Home
Now it’s time to get a bit of an overview of the good and the bad of buying a home in Perth.
- Location: You have plenty of options, including one of Perth’s well-developed outer suburbs or somewhere in the heart of the CBD. This means you can choose a home in a location with plenty of amenities and a culture that suits your desired lifestyle.
- Know what you’re getting: When buying an existing house, there are plenty of opportunities to see the property, its build quality, and its condition. You can first see pictures while browsing and have a thorough inspection completed before you finalise a purchase.
- An easier and faster experience: You can begin “shopping” easily, especially when your finances are in order. Typically, buying and settling into a move-in-ready home is a much faster and more convenient experience.
- Established wear and tear: A property of any kind will experience wear and tear over time. Remember, when buying a ready-made home, you buy its developed wear and tear as well. You will have to be mindful of any repairs that may be needed.
- Improvements and renovations: An older property is likely to have an outdated layout and other issues that call for some improvements or major renovations. On the plus side, this provides an opportunity to customise your home but sacrifices some of the convenience and may introduce previously unseen issues and risks.
- Missing features: Buying a home with everything on your wish list is rare for most. Depending on the property’s location, age, and size, you may have to give up some of the features you hope to find in a property.
The Pros and Cons of Building a Home
Perth is growing, which makes building a home a serious option for many, particularly new homeowners. Here are some of the pros and cons to consider.
- Tailor-made: This is the biggest advantage of building a home over buying. From the beginning, you have control over the property’s location, size, layout, and features. You even have a choice over the exteriors, such as the colour of your roof, window sizes, and materials. This can be a tailor-made dream home.
- Less maintenance: This is a newly built home, so it will take some time before you start doing certain maintenance tasks and performing simple repairs.
- More finance options: While building a home may not always be the more affordable choice, there are more options to assist with financing, such as construction loans and government concessions.
- Time: Building a house takes time and unexpected delays are too common. You could wait six months or even a few years before moving into your home. Worst case scenario, you run out of finances or other serious issues may arise while you wait for your home to be completed.
- Poor quality construction: To meet with an increase in demand and the limited number of skilled workers, your “dream home” may not be as you hoped. Many new homeowners have reported faults in their new homes or issues discovered soon after moving in. For most, a warranty from your builder offers some confidence; however, this does not mean that you are free from risk.
- Risk of construction companies going under: This frightening scenario has been increasing throughout Australia. It is possible that the company you have chosen to construct your dream home could go out of business during your build, leaving you with an uncompleted home. This could lead to a grave financial situation as well as serious stress and grief.
The Bottom Line
It is ultimately up to you to choose by weighing the many factors affecting your situation. You will have to explore the options available to you and decide on what is best for you.
If you would like some extra guidance, you can consider the help of experts such as real estate professionals and financial advisors.