Is it better to buy established or build?
When you are looking to get into the property market you have 2 main options, buy established or build & the choice is highly personalised. These 2 options compete with each other on price, timeframe & host of other factors & the merits of each deal should therefore be compared on a case by case basis.
Generally speaking, an established property will sell for a higher price because it can be purchased instantly (think retail price), whereas a House & Land package takes time to build & is therefore sold at a wholesale price. This is how some developers make money, by buying land, developing homes & selling them for a profit.
The barriers to entry for established properties are higher, particularly for first home buyers. What do we mean by barriers to entry? Typically the greatest barrier to getting into a home is being able to save a deposit. There are government grants to first home buyers such as the First Home Owners Grant (FHOG), stamp duty exemptions & in some cases reductions or waiver of lenders mortgage insurance. For second time buyers, stamp duty can be a deciding factor as you pay stamp duty on the land only whereas for a established home you pay stamp study on the whole property.
When you buy established, particularly for older homes, you often don’t know what you’re getting. A builders report & termite inspection often doesn’t uncover the full extent of the issues with a home. Hot water units breaking down, water leaks, termite damage & other maintenance issues can add up qickly. A new build offers peace of mind that everything is new & you have a warranty period provided by the builder. This means lower maintenance & upkeep costs.
When you buy established you have to love what’s already there & if you don’t you could be up for extensive renovation costs. When building new, the home is customised to your lifestyle.
Speak to an experienced consultant & get exactly what you want the first time!
*This blog offers general information and is not financial, legal, or tax advice. Consult a qualified advisor for personal guidance.