Pros and cons of building your first home
Opting for a house and land package is tempting for many Australian first home buyers because it gives them the chance to get into their dream home sooner and more affordably than buying an established home.
Having said that, there are a number of positives and negatives that come along with building a new home.
If you’re having trouble deciding whether building a new home is right for you here are some pros and cons to factor into your decision.
You get to build your dream, not live in someone else’s- Most builders will allow you to get as involved with the design process as you like. If you’re keen to get hands on with your project you can usually modify and customise the floor plan, select design features, materials and colour palates to suit your taste, lifestyle and budget requirements. If you’re planning on having a family down the track tack on an extra bedroom at the back. If you love outdoor entertaining extend the alfresco area out. You can really have fun becoming an amateur architect and bringing your dream home vision to life.
Brand new fittings, materials and fixtures- There’s nothing like that new car smell and similarly there’s nothing like that brand new modern home feeling. Imagine having your own untouched space with all the mod cons and using everything for the first time in your own brand new home. Also new homes tend to be more environmentally friendly and energy efficient than established ones. They’re constructed with the latest materials and building standards, where for example new homes need to have a minimum 6-star energy rating, which will save you in the long run.
Building warranty- By law all new Australian home builders need to provide a minimum structural warranty between 5 and 7 years (depending on the state or territory) on completed work. This gives you good peace of mind that if anything goes wrong it will be rectified by the builder, unlike if you have problems with an established home where you’ll foot the bill for structural issues. Depending on the builder you go with some will even offer extended structural warranties up to 25 years long.
First Home Buyers Grant- If you opt to build your first new home you will be eligible to receive the Australian Government’s First Home Owner Grant (FHOG) of $7,000 plus your state or territory government’s FHOG.
Stamp duty saving- When buying off the plan you may also be eligible for stamp duty concessions depending on your contract value. Take a look at firsthome.gov.au to check the facts and figures for your state or territory.
You may not get to live where you want to- With vacant lots in inner city suburbs few and far between, unless you’re knocking down an old home and rebuilding, you may not get to live in the suburb you desire. If you’re interested in buying a house and land package for example and you work in the city, you’ll have to be comfortable commuting for over an hour everyday to work, as the vast majority of land developments are an hour or more outside of capital cities. If you do want to live closer in to the city you may consider rentvesting as an option.
Wait to move in- Depending on when the land titles, the weather during your build, unforeseen delays and the size of your build, once you buy the home you can be waiting anywhere between 6 to 18 months during planning and construction before you can move in. So remember you’ll have to continue renting somewhere for the duration of the build at the same time as making payments towards the new home.
Smaller lot sizes- According to the 2015 Urban Development Institute of Australia State of the Land Report the average median new lot size nationally is 474 square metres, that’s 11.4 per cent smaller than the average lot size in 2009. Consider that typical new lot sizes are get smaller and smaller every year and that you may have to sacrifice having a huge garden when buying a house and land package.
Unforseen expenses- We’ve all heard a horror story about big builders underquoting the cost of their homes to make a quick sale or people getting too carried away and adding ‘extras’ and ‘upgrades’ and blowing out their budget. So remember to have a strict budget and stick to it, factoring in fences, gates, security systems, smoke detectors, landscaping, driveway, new furniture and appliances as well. Some builders include fencing and driveways, so make sure you’re clear on what’s included in the package price and what isn’t.
Before deciding if building a new home is right for you or committing to a builder, visit a few display homes to get a feel for modern homes, their pricing and what kind of packages are available.
Happy house hunting!
From the Homely Team