Should I build a house or buy? Pros & Cons from a Building Project Manager.
Answering a question I had before I know what I know now:
Should I build a house or buy?
In the last three years, I’ve built and renovated. Both times, I've asked myself if building or buying was the best option. Admittedly, I’m always learning more and more; in hindsight, if I knew what I know now, my decisions might have been swayed differently.
To answer this question, I’m breaking it into three key considerations: Affordability, Project Management & Design. These three things are what swayed my decisions, and as market conditions in 2023 change, are worth researching and considering in detail.
Affordability
The most important consideration is affordability. It’s crucial to predict your earning capacity and fallback plans if things were to go wrong. This is where experts, such as myself, can help remove the 'unknowns' to ensure the decision you make won't harm you in the long run.
Building a House:
Building may provide the opportunity to save while being built. Usually, you pay the deposit, then interest-only repayments during the build, and at settlement, the full repayments start to take effect. If you are buying off the plan (apartments), you may not need to pay any bank instalments until settlement.
When building, it's important to understand the risk profile during the build—potential delays or variations to the agreed contract sum.
There can sometimes be an escalation advantage to building. For example, the contract is signed in 2023 for the value of the home, but when construction finishes in 2024, the value of the home has escalated without any doing of the owner - win!
Buying a House:
When buying an existing house, a great advantage is certainty around the contract price. In most cases, the offer made wont increase, which is a luxury compared to the uncertainties of building.
Another consideration would be that the value of the home may have already escalated significantly— profit to still be made, but maybe not be as much as a newly built home.
Building Project Management
A huge difference between building a house and buying is the construction period. When you buy an existing house, it’s ready for you the day of settlement—nothing more to it. When you build, inherent management is required. Many clients in Australia choose to manage the build directly with the build/design team. Power to you, but it’s important to understand that to do this, you need to commit time and education into learning how building works. That’s where we come in!
Building a House:
Ongoing involvement is required throughout the build—decision making, problem-solving, researching. People like myself can ease the load, but it still requires commitment from clients for the duration of the build.
Buying a House:
No management is needed, just get to settlement, and the house is yours.
Design Input
Aesthetics may not be your top priority, but it should be a consideration. With a build comes a whole lot more opportunity to customise the home to you and your family. With this, can come a lot of joy and appreciation for your new home. When you buy an existing property, there are still ways to influence it to align with you, just not as much as building.
Building a House:
Nothing quite like influencing the design on paper and seeing it built exactly the way you wanted it.
Buying a House:
Small, more manageable influence over the look/feel—replacing lights, painting or garden.
Overall, I hope you take away that building a house doesn’t always suit everyone. You have to consider a lot of factors before making your decision.
This is all from my experiences as a Project Manager building and renovating in Queensland & Victoria. If you are looking to build soon, we provide 1:1 support can help make building a whole lot easier – and if consults aren’t your thing we have a whole range of affordable building resources to empower you on the building journey.
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And before you know it, you're staring sadly at the concrete slab holding yourself back from calling your builder for the 17th time in one day…
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Written by Annelyse, Building Contract Enthusiast, Project Manager, and founder of Build Together Project Management.
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