Build vs. Buy – What Is Best For Your Family?

When it comes to the fundamental question of housing, most people wrestle with the decision of whether to build or buy a house. This choice is far from simple as it is influenced by a myriad of factors, such as your desired home type, location, costs, time availability, stress tolerance, and risk appetite.

Navigating this labyrinth of variables requires deep consideration and critical thought. To help you embark on this journey, we will delve into each aspect of this vital decision, equipping you with the necessary knowledge to make the right choice for your family.

Analysing Costs: Build vs Buy

A key starting point when deciding between building or buying a house is understanding and comparing the costs involved. If you are contemplating buying existing house and land in Cairns, the financial equation simplifies to: Cost of property + stamp duty. Utilise a Stamp Duty and LMI Calculator to garner a more accurate estimate of the total buying cost.

Conversely, if building a house is your preference, you need to factor in the cost of land, stamp duty, and construction expenses. Here, stamp duty is relatively lower as it is only applicable to the land cost, which can result in significant savings. The construction costs will hinge on various elements such as the size and type of house, typically ranging from R5000 to R20 000 per square meter.

A Budget-Friendly Approach To Building A House

The cost remains a decisive element when choosing between building or buying a house. If you decide to build, there are a few strategies to maximise your budget:

House Design: opt for a basic, medium-sized house to keep costs manageable.

Building Company: Partner with a reputable home-building company that utilises templates or offers fixed-price contracts.

Site Selection: Choose a flat, easily accessible site to facilitate construction.

House and Land Package: Opting for a house and land package can also be cost-effective.

Project Management: Keeping your project organised and not deviating from the final design can save money.

Location: Building in rural areas can reduce costs as labour rates tend to be lower than in cities.

However, if you envision your home to be an architectural masterpiece with luxury features, be prepared for the cost to increase significantly.

Time Investment In Building A House

While buying a pre-existing home can see you move in within weeks or a few months, building a house demands a longer commitment. On average, constructing a house takes at least a year, but this timeline can easily extend due to unforeseen complications.

Emotional Considerations Of Building A New Home

Building a house can be an arduous, stress-inducing process. The journey from an empty plot to a finished home is fraught with uncertainties, which can inflate your project’s timeline and cost. While hiring a project manager can alleviate some of this pressure, it adds an additional expense.

New Builds And Maintenance Costs

Choosing to build a new home carries the advantage of low maintenance and energy costs. Older homes tend to demand more repairs and energy expenditure for heating and cooling, primarily because they were not designed with energy efficiency in mind. In contrast, a newly built home offers a comfortable living experience with lower energy bills and maintenance costs, thus enhancing its appeal to homeowners and tenants alike.

The Value Of Your New Build

Despite short-term market fluctuations, property values tend to increase over the long term. This trend means that the value of a house you build could increase significantly by the time you complete the construction, potentially creating additional equity and improving your loan-to-value ratio.

Tailoring A House To Your Needs

A primary appeal of building a house lies in its potential to meet your precise needs and wants. When you build, you have the freedom to design your home’s floor plan, choose specific features, and select fittings that align with your lifestyle and preferences. Whether it’s a specific number of bedrooms, a pet grooming room, a beautifully maintained garden with Maidment landscaping, or a music studio, the opportunity to build a house that perfectly accommodates your family’s needs can be incredibly fulfilling.

Financing Your Build Or Buy Decision

Securing a home loan to buy an existing house is a straightforward process involving a lump-sum payment at settlement. For the more complex process of building a house, a construction loan is typically preferred. This type of loan releases funds at different stages of construction to meet the evolving costs. It begins with an interest-only rate during the early stages, but as the project advances and more money is borrowed, the cost of borrowing increases.

Conclusion

Deciding between building or buying a house, hinges on a complex interplay of factors. Each option carries its own advantages and challenges. Buying a house offers simplicity and speed, whereas building a house provides customisation and potential long-term savings. As you consider the financial implications, time commitment, stress factors, personal desires, and other variables, remember to prioritise what best suits your family’s needs and lifestyle. Ultimately, the choice between building or buying a house is not just about cost but also about creating a comfortable, fulfilling space where your family can thrive.