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Should you buy or build your home?

Georgia Brown avatar
Georgia Brown
- 6 min read
Should you buy or build your home?

For many, the idea of building a home from scratch is an exciting prospect. But what factors should first be considered and how does it compare to buying an existing dwelling?

Building a new home can be a great option for some, while for others, buying an established property makes more sense. For the most part, it will come down to your personal preferences, individual circumstances and budget.

A helpful way to figure out what’s right for you is to compare the benefits and disadvantages of each option and consider how they may apply to your situation.

Building a new home


  • You’re in control – Starting off with a blank slate means you’ll have the opportunity to customise the layout and design of your new house to suit yours and your family’s preferences and lifestyle. 
  • You can opt to build sustainably – You’ll also have a chance to ensure your new home is future-proof by building it to high sustainability and energy efficiency standards. This could also be more attractive from a resale perspective.
  • You could save money on stamp duty – When you’re buying land to build on, such as a house and land package, you typically only pay stamp duty on the cost of the land. This will likely save you money as stamp duty is calculated as a percentage of the purchase price.
  • Construction home loans can help you manage your budget – There are a range of home loans on the market which have construction loans available. This can make it easier to manage your budget throughout the building process as you’ll have access to money at different stages of your home being built, rather than in one lump sum. 


  • You can’t move in straight away – If you’re building from scratch, you’ll need to have some time up your sleeve as you won’t be able to move in until construction reaches completion.
  • You may need to exercise your patience – It’s not uncommon for building delays to occur due to weather conditions and other unforeseen events. These kinds of delays can often push out your expected completion date by months. So, you’ll want to ensure you’re able to remain flexible.
  • It could cost more than you anticipated – If any major issues pop up along the way, you may have to spend more than you had originally expected or consider reallocating funds from other areas of the build.
  • Your expectations may not be met – Things can go wrong when building a home such as faulty fixtures or sections not built correctly and needing to be re-done. You may also find that certain things don’t turn out exactly how you envisioned.

Buying an existing home


  • You can move in (almost) right away – After settlement is complete, which usually takes around six weeks after contracts are exchanged, you can move straight in. Even if you plan to renovate, it’s generally possible to do so while you’re living there.
  • Location options are broader – You will generally have more of a choice as to where you can buy an existing home compared to building a new home, as you aren’t limited to vacant blocks available or knocking down old homes. You’re also more likely to find a place close to the city if you buy existing – if that’s important to you and your lifestyle.
  • The total cost is clearer – If the home you’re buying is move-in ready and you’re not planning to renovate, you’re unlikely to have as many unexpected costs crop up as you might with a new build.
  • You could buy a piece of history – Older, established homes tend to have more character features – such as high ceilings and ornate fireplaces. If you have a preference towards character homes or architecture from certain periods, an existing home with historic features may be more suited to your needs. 


  • It may be a waiting game – It can take some time to find exactly what you are looking for in a home, as you will need to wait for stock to come onto the market.
  • Renovations can add up – It can sometimes cost more to change what you don’t like about an existing home compared to building a home from scratch. Before you consider buying a fixer-upper, make sure you do all your calculations and shop around for contractors.
  • You may be restricted in what renovations you can do – Some renovations may require permission from your local council. It’s important to take this into account as the process can take time, and there is a risk that your application may not be approved, and your plans will need to be altered.
  • Aging homes can come with hidden issues – If you buy an older home, there’s a chance that you may be faced with certain issues such as unexpected leaks and faulty wiring, which can be quite costly to fix. That’s why it’s important to have a building and pest inspection completed before you buy a home. But keep in mind, some issues may only occur after you move in. 

How to choose between buying or building a home

In addition to weighing up the pros and cons of each, it’s important to understand what might work best for your circumstances. To do this, consider asking yourself the following questions:

  • Is it important for you to live close to the city, or is the location of your home more flexible?
  • Do you need to move in by a certain date, or do you have plenty of time up your sleeve?
  • What are your architectural preferences?
  • Do you have flexibility in your budget?
  • Do you enjoy decision making processes, or would you prefer to leave it up to someone else?

Once you have decided whether you are better off buying an existing home or building a new one, it’s time to start looking at home loans that will help you achieve your home ownership goal. Consider using RateCity’s home loan comparison tables to compare home loan options available to you.

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Product database updated 14 Jun, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.