If you’re in the market to purchase real estate, deciding whether to build or buy an existing home is typically your first point of call.
A recent Canstar article discussed whether to build or buy an existing home in Brisbane. It revealed that it was in fact cheaper to buy an existing home than to build a new one. Obviously, there are many considerations involved in the decision making process. It generally depends on a lot of factors as well as individual preferences. The type and size of the home will play a part, as well as the location that you want to live in and, of course, your budget. With so many factors in play, it is impossible to know with certainty. There are, however, 5 things that you should consider in making your home buying decisions. Helping us discover these 5 important factors is Licensed Calibre Real Estate Agent, Simon Hughes.
Simon is a member of the Calibre Real Estate sales team and has also been a self employed architect for over 20 years. Simon has designed homes for many local families in The Gap, Ashgrove, Bardon and all the inner west suburbs. He has a long, glowing record of successfully guiding clients through the process of building a home, and is aware of the similarities in the often stressful process of buying and selling real estate.
Simon tells us that “Building specific knowledge that falls squarely in the realm of architecture can be an invaluable benefit in any real estate transaction.”
So, here they are, tips from the Real Estate & Architect expert, Simon Hughes…
Top 5 Important Factors To Consider : Should I Build Or Buy An Existing Home?
Tip # 1 : Time Costs Money
Building a new home takes time and time can cost money. The Australian Housing and Urban Institute (AHURI) says it can take up to 7.5 months on average to construct a new home. Since the year 2000, the construction time to build has doubled. When you add design time-frames and the Development and Building approval process, this can push out to 12 months and more. In contrast, buying an established property can take as little as 30 days from signing the contract to the date of settlement and moving in.
Tip # 2 : The Elephant In the Room ($$$)
Once again, time costs money ! If it takes 12 months or more to move into a new build, costs like rent over that period are additional expenses that will need to be taken into consideration. In addition, financial holding costs and professional fees from architects, engineers, surveyors and town planners can be substantial and are often not required when buying an established property. Building costs are increasing year on year. Building material costs keep going up and home building has become more complex due to increasing compliance with new building codes and energy efficiency standards. In most capital cities, including Brisbane , land costs are at a premium, and this has a major impact on the desired location and the overall costs to build.
Tip # 3 : Location, Location, Location
Buying an existing home usually means buying into an established neighbourhood. This means that you know what you are getting with respect to existing public transport, schools and shopping facilities. Should you desire to live close to the city, vacant land, if there is any available, is rare find. Land costs alone can be comparable to the costs of established homes. With strict interpretation of local councils Demolition Codes, land within the inner city precincts are almost non existent, and therefore at a price premium. Sellers of established homes generally are less concerned with replacement costs than they are with returning a profit on investment.
If living close to the city is a necessity, buying an existing home may be the only option, and as a result, the home renovation sector is booming, with buyers wanting to live in preferred locations and altering their homes to suit their lifestyles. Renovations done well, can add instant value.
Tip # 4 : Added Extra’s
When you buy an existing property, things like the landscaping, pools, fences and driveways are included in the sale price. These costs are additional extra’s when building from scratch and are often underestimated by new home buyers, or not considered at all. If you have been to a plant nursery lately, you will quickly appreciate the dollar value of the established trees and plants in your back yard. These extra’s fall squarely into the sector of the unknown in building a new house.
Tip # 5 : Fear of The Unknown
When you buy an existing property, you know what you are getting. You can walk into it, around it, touch it. It means that you can immediately identify potential defects and items that may show up in a pre-purchase building inspection. You can with some help from your real estate agent get information on the sales history of the area. This will typically give you an insight into capital growth potential. When you build, you wait 12 months and live in hope that all your expectations are fulfilled. I wonder what they are going to build next door ? Did we get the design right ? Will it suit our lifestyle ? Did the builder do a good job? What went wrong with that and why did it cost so much?
In the end, the decision to build or buy an existing home, will come down to personal needs, preferences and desires. The best decision you can make is an informed one .
For other helpful real estate articles see :
- Expert Tips To Have You Renovating For A Profit Like A Pro
- Know Your Buyer : The 7 Profiles Of Property Buyer Demographics
- Why Is My Water Bill So High? And How To Fix It.
- The Best Brisbane Buyers Search Checklist for Residential Property
- Real Estate Power Couple Acknowledged For Their Entrepreneurial Success
- Ten Tips For Buying Real Estate That Will Save You Money