Should I Buy An Existing Property or Build a New Home?
When looking to buy a new home, it’s easy to start dreaming.
But the question remains - should you consider purchasing an established property or building a new house from scratch?
While both options offer enticing opportunity, there are plenty of arguments for and against.
If building a house is on your wish list, you’re certainly not alone, with South Australia experiencing a boom in residential construction over the past few years.
But purchasing an existing home is still the most preferred option - and with house prices tipped to fall over the coming months, it remains an attractive choice.
So which should you choose?
We’ve put together a comprehensive pros and cons list to help you decide.
BUILDING A NEW HOME
The argument for:
Custom everything.
Building a new home offers the opportunity to customise your new home from the ground up. Everything - from the footings to the façade - can be tailored to represent your vision. The layout, the colours, the fixtures and fittings are chosen by you.
Peace of mind.
A brand new home comes with brand new fittings, fixtures and appliances. And these brand new features all come with warranties should anything go wrong within the first few years, which is a welcome bonus.
Lower Costs.
Building a new home has the potential to save you serious cash.
Governments often subsidise new builds, and offer incentives for first-home buyers to get on board. The First Homeowner Grant is one such scheme.
And even if extra funding isn’t available, often the overall cost purchasing some land and building on it is less than buying an established property. This is especially true in metro areas because land releases generally happen further from the city centre, in less established neighbourhoods.
Plus, because you’re using modern materials, you’re likely to end up with a more energy efficient build that will help keep power bills at bay.
The argument against:
Location.
While it can be a money-saver, newly built homes are more often than not located further from the centre of town, in areas where vacant land is still available. Longer commute times and lack of amenities can be a little off-putting for would-be homeowners.
A long lead time.
Building a brand new home means foregoing instant gratification. That’s because construction takes time - sometimes many months - and can bring with it a whole lot of stress when things get delayed, or when ideas and opinions clash.
Cost blow outs.
While so many things contribute to the final price tag, building a new home is usually considered the cheaper option - but when things go wrong, the process can actually end up costing more than you think. Subject to unexpected delays and fluctuating material prices, new home builds can seriously disrupt your cash flow!
Plus you need to remember to factor in additional costs like design modifications, renting somewhere while you build, site preparation and landscaping.
BUYING AN EXISTING HOME
The argument for:
Time.
Put simply, buying an existing home means you can move in faster.
Unless you’ve negotiated a long settlement, once all the paperwork has been done and the money’s changed hands, you’re free to start unpacking boxes. No waiting around for tradesmen to finish off the caulking.
What you see is what you get.
When buying an existing home, you know what you’re getting. You can go to the open, speak with the agents, have building inspections done and find out about the home’s history all before you move in.
While not everything will be designed exactly as you may have liked, you won’t have to worry about poor workmanship or rushed installations becoming a problem down the track. With the right inspections, you can have faith that the home is in top notch condition.
Potential & Value Growth.
When you compare an existing home with a brand new build on paper - bedrooms, bathrooms, land size - it’s easy to overlook potential.
But older homes have a trump card - opportunity for improvement.
For instance, if an older home and a new build are similarly valued, the existing home may be the wiser choice because there’s scope to renovate and increase its value considerably. A brand new build is a lot more limited, at least in the short-term.
So if you’re keen to renovate or add your own personal touch, an existing home could be a great opportunity.
Location.
If you decide to buy an existing home, the world is your oyster. You have absolute freedom to choose where you want to live, because you’re not limited to new development areas, or relying on luck that a vacant block becomes available in your preferred suburb.
The argument against:
Wear & tear.
It goes without saying that an existing home will have some elements that aren’t as pristine as they once were.
Older properties generally go hand-in-hand with higher maintenance, and as things wear out - like plumbing, appliances and paintwork - they’ll need updating or replacing.
And just like buying a second-hand car, you could also run into some unforeseen issues that end up costing a king’s ransom.
A competitive market.
The current market for existing homes is super competitive - so even if you find the one you want, you’ll likely be competing for it, and feel compelled to make offers over and above market value if you’re not prepared to let it go.
Even in a slower market, the chances are you won’t be the only one hoping to snag the home, so you could end up paying more than you’d hoped.
Less customisation.
The most obvious drawback when deciding to buy an existing home is the layout. It’s set.
And unless you’re prepared to do some major renovations upfront, you’ll be living with it for quite some time.
Plus, the décor can sometimes be dated and daggy in older homes, so if you’d prefer a place with a few extra mod cons to enjoy straight away, your search may be limited to properties that have seen recent upgrades.
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Buying or building a new home is one of the biggest and most exciting decisions you will make.
So you should ask yourself some questions upfront to get clear on what it is you want.
Here’s a few that might help narrow down your decision:
- Where do I want to live? An established area, or newer location further from town?
- When do I need to move in? Am I on a timeline?
- What’s my budget? And can I afford bridging finance if necessary? Can I afford to renovate?
- How long do I see myself living in this house? Is it my ‘forever’ home, or just my ‘for now’ home?
- Am I prepared to live with a few things that aren’t quite perfect, or do I want a home that meets all my needs upfront?
There are so many variable factors to consider when it comes to making the decision to buy or build a home.
Consider your lifestyle, your budget and the market conditions at any given time, and take your time deciding exactly what it is that will make you happy and achieve your goals.
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And if you’d like some expert guidance and support? We’re ready and waiting to answer all your questions!
If you’re just getting started, or looking for more valuable property buying tips, tricks and hints, check out these other handy articles on our blog:
× The 7 Hidden Costs Of Buying A New Home
× Does the Perfect New Home Exist?
× 8 Things To Ask BEFORE You Buy...
And for all the very best property sales or investing advice, why not connect with us - We Connect Property are your local property market specialists with over 21 years’ experience in buying, selling and managing property in southern Adelaide.
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DISCLAIMER: All recommendations made by We Connect Property are general in nature and not to be relied upon as legal or financial advice. To ensure accuracy, we always strongly recommend seeking independent, professional advice tailored to your specific situation before making any investment or financial decisions.