Should you buy or build your home?



Dec 3, 2010( 3 min read )

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Most of us have dreamt about building our own homes from scratch, with our own designs, layouts and favourite things. But this dream is not often realised as building a home requires finding affordable, well-located land, so a lot of people take out a home loan and buy an existing home instead.

There are advantages and disadvantages to both so we have laid out a few points for you to mull over.

Building a new home


  • You can customise the whole layout and design of your new house to suit you.
  • When it comes time to sell, it may be easier to sell a newer home rather than an older one as they are seen as more appealing.
  • There are a range of home loans on the market which have construction loans available. This can make it easier to manage the whole process as you have access to money at different stages of your home being built, rather than in one lump sum. 
  • You may be eligible for the first home owner’s grant (new homes) scheme. This was implemented in October 2012. Contact your state’s Office of State Revenue to see if the grant is available and if you’re eligible. 


  • The major downside is that you can’t move in until your home is built.
  • You may also have to spend more than you anticipate if major issues pop up along the way.
  • Things can still go wrong when building a home such as faulty appliances or sections not built correctly and needing to be re-done. It can take time and persistence chasing builders to get your home built according to plan.

Buying an existing home


  • After settlement is complete (this usually takes around six weeks after contracts are exchanged), you can move in right away.
  • There is more choice on where you can buy compared to building as you aren’t limited to vacant blocks available or knocking down old homes.
  • Many existing properties have most things done such as landscaping and the gardens done, which is one less cost to consider.


  • It can sometimes cost more to change what you don’t like about an existing home compared to knocking it down and rebuilding. Make sure you do all your calculations first and shop around for contractors.
  • Some renovation may require permission from your local council, take this into account as the process can take time.
  • You may be faced with unexpected leaks and faulty wiring which can be quite costly to fix.

Once you have decided whether you are better off buying an existing home or building a new one, start looking at home loans that will help you achieve your home owing dream. Compare thousands of Australian home loans using the RateCity home loan comparison tool and calculate what your loan repayments will look like.


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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