Buy vs. Build
You’ve finally been pre-qualified and you’re ready to buy your home. But all the options are just not quite right. It’s either the perfect house in the wrong location or the average home in an excellent location. For some, this may spark the question, is it better to buy or build?
It’s a lesson in perspective. What’s most important in your life? For those seeking immediate possession, convenience, and less involvement in the construction process, buying a property might be the right choice. On the other hand, for individuals looking for full customization, buying land and building at their own leisure is an option. Both options have their merits and drawbacks. Buyers should carefully assess their specific needs, preferences, and financial capabilities that best align with their present and future goals. Here’s a list of pros and cons to get you started on the best option for you:
Buying a home
- Move-in ready - One of the most significant advantages of buying an existing property is the ability to take immediate possession. Outside of potential upgrades on the property, there's no waiting period for construction, making it suitable for those who need a place to live without delay.
- Established Infrastructure - An existing property generally comes with established infrastructure, such as water supply, electricity, and sewage systems. This can save time and money compared to setting up utilities on a vacant land plot.
- One and done - Apart from the statutory fees when buying a home, purchasing a home generally incurs a huge upfront capital investment rather than the bridging interest and other fees associated with building throughout construction. The total cost of buying a property is generally more predictable compared to building on land.
- Higher stamp duty for improved properties – Unfortunately,for improved residential properties (house and land), the stamp duty charge is higher than just land alone. This means you spend more in your initial outlay.
- Limited Customization - Buying an existing property often means compromising on certain features or layouts, as it may not perfectly align with your preferences and requirements. If significant changes are needed to suit your needs, renovation costs can escalate quickly.
- Maintenance and repairs: Older properties may require more frequent maintenance and potential repairs, which can add to the overall cost of ownership, especially if you don’t know the history of the property.
Buying land and building
- Location: Choosing the right piece of land allows you to select a location that aligns with your lifestyle, budget, and preferences. You can choose land with scenic views, proximity to schools or workplaces, and other amenities. Another benefit is if the land is in a desirable area with potential for growth, its value may appreciate over time, providing a return on your investment.
- Customization and Design - When you build on your own land, you have full control over the construction process, ensuring that the quality of workmanship meets your standards. This level of customization guarantees that the property perfectly aligns with your individual needs and preferences.
- Energy Efficiency - New constructions can be built using modern materials and construction techniques, making them more energy-efficient and potentially reducing long-term operating costs. A newly constructed property can be designed with the latest technology in mind, such as smart home systems and eco-friendly features.
- Costs - Building on land can be expensive, particularly when you factor in the cost of construction materials, labour, approvals, and other associated expenses. Construction costs can be more challenging to control and predict, and unexpected turns in the economy and delays or changes during the construction process can lead to additional expenses. Additionally, building a property requires engaging with architects, contractors, and builders, which demands a certain level of expertise, management and money.
- Infrastructure and Approvals - Developing vacant land may require additional expenses for setting up infrastructure, such as utilities, and obtaining necessary approvals from the relevant authorities. Building on land is subject to local zoning laws and building codes. These regulations may restrict certain design aspects, property uses, or building heights. Also, depending on the location of the land, you may need to invest in infrastructure and utilities, such as roads, water and sewage systems, and electricity.
- Time-Consuming - Building a property from scratch takes time. From obtaining approvals, architectural designs and weather delays to the actual construction process, it can take several months or even years before the property is move-in ready.
Choosing the Right Option
The decision between buying an existing property or building on land hinges on various factors, including budget, timeline, customization needs, and long-term investment strategy. Potential buyers should ask themselves what’s most important to them when acquiring a property. Is it convenience or cost? Is it location or customization? Whatever the need, our Agents are here to ensure you feel comfortable and confident to make informed decisions.