To build or to buy that is the question
We shape our buildings; thereafter they shape us. –
So you’re ready to change your life with a new home. Congratulations, it’s a big first step. Now comes a litany of decisions, the first of which may be: do I buy an existing home or build new?
Buy or build?
This is an intensely personal decision based on a myriad of drivers. Much has been written on this topic and there’s no ‘one size fits all’ approach. However, there are a number of things you should think about.
- Location – where do you want to live? Is land available on which to build in your chosen area or will you have to factor in demolition costs of an existing building?
- Finances – what are the costs involved? This is a BIG question that requires in-depth research of the various options and an honest examination of your finances, job/business security and your risk profile.
- Market forces – what are the current trends suggesting? Is it a buyers/sellers market? What’s the likely return on investment (ROI) of new versus existing housing stock?
- Timeframes – are you prepared to wait for the duration of the build? Do you have contingencies in place should the schedule fall behind?
- Logistics – can you afford to rent while you build or find other accommodation?
- Inclusions/exclusions – be clear about what’s included and excluded in your building contract, especially in regards to variations. Changes to your building contract can add up fast and also potentially cause delays.
- Future plans – is this your ‘forever home’, a short-term plan or an investment property? How will that affect your decision about the end product? Are there any tax implications?
- Experience – do you have any experience in buying, building or investing in the property market? Are you confident you have the skills to navigate your chosen path?
- Resilience – building, in particular, can require significant emotional and mental resilience. Are you prepared to go the distance?
Let’s face facts: you’re going to have to do some serious research. There is no easy way to make this decision because it’s unique to you and your circumstances. Talk to friends and family who have both bought and built for their comparative views. Negative experiences, especially when it comes to building, often dominate conversation so ensure you talk to more than one person to obtain a balanced view.
Don’t be intimidated by the prospect of building. Often people dismiss building as a scary and unrealistic proposition, believing it’s too expensive, too difficult or both. But in fact, if you partner with the right builder and choose the right home, it is a valid option for any and all future homeowners regardless of your situation.
Benefits to building
There are pros and cons to every situation but the lure of tailoring a design to fit your needs, desires and lifestyle, and building your dream home is intoxicating and achievable. Here are some other benefits.
- A new home will reflect contemporary architectural designs and styles, and will accommodate the latest spatial, acoustic and technological trends, such as wiring for smart houses, high speed internet and/or NBN.
- Significantly less ongoing maintenance is required.
- Enjoy peace of mind with a standard five-year builder’s warranty, which applies to all new homes, plus warranties on all new appliances.
- Building, environmental and safety standards will all be up-to-date.
- New homes are likely to be more energy efficient in their design, construction and choice of materials, which will save you money in utility bills and be kinder to the environment.
- New homes are often built in new master-planned neighbourhoods, which incorporate and have good access to community facilities like parks, sports grounds, shopping precincts and schools.
- If you are considering renting the house as an investment vehicle at any stage, houses less than 30 years old can be depreciated and so represent a tax advantage.
When it comes to building, there is a diversity of offerings in the market. If you’re property savvy and experienced with appropriate skills, you may decide to go it alone with the help of an architect and/or a draftsperson. But the vast majority of aspiring homeowners find that route overwhelmingly daunting, and rightly so.
The most well-trodden path is to engage a project home builder. Ross North Group is designed to meet the needs of anyone and everyone looking for a new home regardless of age, stage, experience and budget.
Project homes are no longer what they once were. In our 40 years in business, Ross North Group has been a part of the transformation of the WA residential building market during which time it has become more competitive, agile and sophisticated. Once upon a time, choosing a project home meant picking A, B, C or D design and that was it. No customisation, no adding rooms, few changes to specifications allowed. Partnering with a project home builder these days opens up a world of choice, enabling you to keep it simple and cost-effective, customise to your heart’s content or even work with our architects and draftspeople to create your very own bespoke design from the ground up.
Demographics, trends and affordability
As a residential builder with 40 years of experience under his belt, Ross North Group has watched trends in the property market come and go as socio-demographic changes dictate. His observations and insights offer an interesting view of the residential building landscape.
“There’s a lot of talk about housing affordability lately but movement in the market and my own observations give me confidence for a robust building market now and into the future,” Mr North said.
A recent article from REIWA suggests that housing in Perth is at its most affordable in more than a decade with figures showing Perth’s median house price was $535,000 for the three months to the end of November 2015.
“That’s good news, especially for Generation Y, who may be staying at home with Mum and Dad longer and starting families later, but they haven’t given up on home ownership and neither should they,” he said.
“It’s a common perception when it comes to home ownership that young people want more earlier in life than previous generations. They expect to be able to afford bigger and better houses with all the bells and whistles, not the modest, first home caravans of the Baby Boomers. I think that’s largely true but from what I’ve seen they’re also prepared to wait for it and work for it,” he said. Complete Homes meets this market head on with homes tailored for people just like Joel, who we met in the first article of this instalment.
Families and empty nesters are groups with their own unique opportunities, challenges and constraints. The broad and varied demographic encompassing families is typically building the largest homes on the largest blocks furthest from the dense urban centres, both from an affordability and lifestyle perspective. Those on the cusp of becoming empty nesters, like Susan, and retirees are often making deliberate and informed choices about what they want based on their values, interests and position of relative wealth. They’re thinking about resizing, reshaping and reordering their priorities when it comes to where and how they live. Often they’re spending more on less, meaning their house may be smaller but it’s of a higher specification or in a better or more expensive location.
What’s the best advice to help you make the decision to buy or build? Do your homework, don’t be hasty and consider all your options with an open mind.
Be sure to read next month’s article, the final instalment of this three-series feature, which explores the emotional and mental commitment of building and starts you on your journey.
Complete Homes are the specialist first home builders in Perth. If you’re leaning towards building your new home, speak to us about our house and land packages around Perth. Remember that we also have display homes in Perth, north of the river and south of the river.