Building A New Home vs Buying an Existing Home
Looking for a new home can be daunting. Not everyone wants to settle for a pre-built home that is not up to their personal standards but building a new home can seem like an impossible mountain to climb. For those torn between the two options, we have done the hard work and compared the pros and cons of building a new home versus buying an existing one. We hope it helps clarify what you want from your dream home.
The first thing to take into consideration when making the choice between new builds and pre-existing builds is your ideal home characteristics. Some questions to ask yourself include: Do I want to commit to doing renovations soon? What location do I want my home to be in? And do I value energy efficiency over lower upfront costs? Once these (and other) personal preferences have been identified, it will be easier to decide between the two options.
Pre-existing Home – Pros & Cons
A pre-existing home purchase is the most common choice for a lot of homebuyers. This is typically due to being in more central and or suburban locations, offering an (almost) immediate move-in and the character of the home.
A retro-style home can often ooze personality with its unique quirks. Some people love this as it demonstrates individuality and says something about their style. The idea of a house having lived multiple lives also adds to the charm and warmth of a pre-existing build, making it seem just that much homelier.
Another positive for purchasing an existing house is that depending on the settlement date, move in can be immediate. No waiting for your new home to be completed.
Part of the work that comes with deciding to buy an existing home includes all the paperwork and compliance, from building reports to council costs, insurance bills, not to mention unexpected repairs and constant maintenance.
The character of existing builds can sometimes mean repairs. Due diligence with building inspections can only uncover so much; some problems are only detected when you live in the home. Problems can add up and, with a mortgage, it could all get financially overwhelming very quickly.
New Builds – Pros and Cons
There are numerous advantages to building a home from scratch, including minimal maintenance, customisation and, potentially, a higher sale price than the cost of the build.
When building a new home using reputable and reliable builders, there should be no costly renovations or repairs for a long time. This will appeal to those who want to spend the early years of new-home ownership focusing less on what needs to be done to the home and more on things like paying off mortgage (and enjoying life). It is a huge advantage from not only a financial viewpoint, but from a personal wellbeing perspective as well.
Another advantage of building a new home is the opportunity to customise it to your personal needs and stylistic preferences. When building a new home there is a chance to create space for a growing family or build something smaller if you wish to downsize. When envisioning their dream home many people look for a place that caters to what they want, not necessarily what the previous owners may have wanted. A new build home allows for individualisation to suit your circumstances and needs.
A well-built new home also means that the house will hold its value. With little maintenance required, you can expect a higher sale price if you wish to sell – market forces withstanding. Those who build homes as investment properties often find remarkable success in this regard.
However, there are also cons to building your own home. Construction is expensive in New Zealand and many builders are today less likely to agree on a fixed price contract. Without an agreed build contract any material cost increases will be passed on to you. While individualisation is great, sometimes changing the original design of your new home can cause prices to skyrocket.
Luckily, places like Paerata Rise offer contract deals and financial advisors to prevent this from happening.
Existing homes are usually in established suburbs with shops, schools, public transport and more. However, with the increase in working from home options, a beautiful new home in a quiet area may be just the work/life balance you need.
There are many different elements to consider when choosing whether to buy an established house or build a new one – but only you can truly decide what you want from your future dream home. At the end of the day, who doesn’t love a beautiful new home, built just for you. It all comes down to your financial position and your personal goals.