Is the cost of building a new house putting you off? Here’s what the experts suggest instead.

Less people are building new houses in Australia than in recent times. In December there were only 13,085 building approvals in Australia. This was 9.5% below the previous month’s count — and a 24.0% drop from the same period the previous year, as reported by the Australian Bureau of Statistics. This decline in new builds has been a consistent trend, with approval numbers falling short of the 15-year monthly average of 16,040 for 12 consecutive months.

Why this is happening

Potential home developers and buyers have been deterred by the effects of the pandemic-induced supply chain disruptions that still impact Aussie construction. The process of building homes is now filled with uncertainty because of two big reasons: changing costs and the availability of materials, which has made many builders hesitant to start new projects. At the same time, high interest rates are making it harder for people to afford a mortgage on a new home while they’re still paying rent. 

For many people who dream of building their dream home, this has been quite the bitter pill to swallow. Whether it’s the risk aspect, or the reduction in disposable income, it can feel a little like your new home dream is out of reach. However, there is a silver lining, according to Queensland buyer’s agent, Lauren Jones from LJBA. “In the past year, there’s been a noticeable uptick in interest towards purchasing knockdown rebuild houses.” Buyers can live in these properties for the next few years while they plan their rebuild,  waiting for a stabilisation in the construction sector.

This emerging trend towards knockdown rebuilds could be a very strategic move for those looking to navigate the uncertain terrain of the current housing market without having to pay two mortgages or take on the risk of end-to-end construction.

Put simply, buying a house now that you plan to knock down in the future and  can live in now— on a great piece of land— is not only a good investment if done right, but will also let you have your cake and eat it too when construction costs stabilise. 

Better still, it’s a viable option to avoid missing out on the market right now. With Australia’s population growing and more people needing homes, the gap between how many homes are needed and how many are being built could make homes more expensive and harder to find.

Lauren has a few tips for those looking to knockdown rebuild:

1. Location: “There are a few things to consider when buying a house to knock it down and rebuild. The most important consideration is the location as you simply cannot change it.”
2. The Block: “Next you want to consider if it’s the right block for the house you want to build. Consider things like the size, the shape and the slope. Also you must ensure that the council will allow you to demolish the house. A local town planner can help with this.

3. What lies beneath: You will want to ensure you know what is running below the ground. Check with your local council as to where the sewer, water and stormwater connections are.”

4. Sharing is caring: Finally, Lauren’s tips for smashing your knockdown rebuild out the park is to share where you’re thinking of buying with your builder. “It’s best to share the block with your desired builder before you buy it to ensure that they can complete the build and give you a price estimate. Make sure to ask how long they estimate it to take, and give yourself extra time, too, as time frames are known to blow out.”

With more listings coming onto the market, it’s a great time to keep an eye out for your next knockdown rebuild project. Set up an Alert and start your Collection to get started and start searching for your perfect new project.