Buying versus building a house: Weighing up the options

Owning your first home is one of life’s most exciting milestones. But getting there can be quite daunting if you're just getting started. Deciding if it's better to buy or build a house in Australia is one of the biggest decisions you will make...and there's a lot to think about.

Should you buy an established home or build a new home? What are the pros and cons of each? And what should you consider when making a decision? This requires you to zero-in on many factors: your own circumstances, location, budget, space, future considerations, energy efficiency and much more! Plus our team shares some insider tips you don't want to miss!

Location: Where do you want to live?

Start by comparing established suburbs with areas where land or house and land packages are available. Buying an existing house may place you closer to schools, shops and public transport. But with land availability in inner Brisbane in short supply, building may give you more choice in a newer community where amenities are still being developed.

The local housing market and property value will most likely shape your options. Compare recent sale prices for established homes with land prices and estimated building costs in places you’d be happy to live. A capital city median house price gives you broad context, but prices in your preferred suburbs will tell you far more about what your budget can buy.

Insider tips from our team

• Look beyond the suburb name. Check travel times, school options and the amenities you would use every week.
• If you're considering a new community, find out what's in the location now and what's planned, such as new roads, shops, parks and other facilities.
• For established areas, check local council planning updates that may change density or the look and feel of the surrounding streets.

Is it cheaper to build or buy?

There’s no single answer to whether buying or building a house costs less. Start with your borrowing power, then compare properties and packages in locations that meet your needs. Understand upfront costs, whether you need to pay stamp duty, and if there are likely to be hidden costs or surprises. Government incentives or grants may also be available to help offset your costs.

Buying an established home: The purchase price gives you a starting point, but it may not be the final cost of making the home your own. Factor in any stamp duty and inspections, then consider whether repairs or renovations could add to your budget.

Building a new home: With a new build, the land purchase price, site costs, construction costs and items outside the quote all need to be considered together. If you build, you’ll need to account for site works and anything your building quote doesn’t include. Fixed price contracts and price lock offers can give you greater certainty about the agreed building price in the event of rising construction costs. Check what each includes and how long the price lock applies.

Insider tips from our team

• Compare the total cost of an established home and a new build in locations that work for you, including what you’ll need to spend after purchase or handover.
• Check whether the government programs you’re considering can be used together. For example, Queensland’s Boost to Buy cannot be combined with a Commonwealth home buyer guarantee or shared equity scheme.

Grants and incentives

Government programs like first home owner grants and incentives vary by state and reduce upfront costs first home buyers.

Many states also offer stamp duty concessions for first home buyers building new homes. At the time of writing, Queensland first home buyers pay no transfer duty on a new home or residential vacant land purchased to build on with no upper limit.

Eligible first home buyers purchasing an established house pay no duty up to $700,000 but the concession reduces progressively and ends at $800,000.

The table below shows which incentives may apply to each option. Be sure to check out eligibility criteria for each program and give yourself ample time to go through the application process.

Understanding the full cost

The advertised price is only one part of your overall budget. Whether you buy an established home or build new, it's important to understand all upfront and ongoing costs so you can make an informed decision and plan with confidence.

Costs to consider regardless of whether you buy or build include legal or conveyancing fees, moving costs and somewhere to live until you can move in.

Buying an established property: Budget for building and pest inspections, insurance and any repairs identified before purchase. After moving in, you may want to improve insulation, replace an ageing hot water system or install more efficient heating and cooling. Get quotes for any significant work before deciding what you can afford to offer and factor in increases in labour costs for future work.

Building a new home: Check what your land and building prices include. Depending on the builder, additional costs may apply for items such as site works, service connections, fencing, driveways, landscaping or window coverings. Some builders also charge extra for bringing certain orientations up to the minimum 7-star energy standard. Reviewing your tender carefully can help you understand the full investment before you sign.

Insider tips from our team

• If you're building a new home, look for transparent pricing upfront, including being able to see the full tender before signing a contract
• With Plantation Homes, a minimum 7-star energy rating is included across all lot orientations, base façade and standard inclusions, and built into advertised prices
• If an established home needs repairs or upgrades, find out what the work could cost before deciding how much to offer.

Home loans: how does finance differ?

Whether you buy or build, speak to a lender early to understand borrowing power based on your personal circumstances and the upfront costs you’ll need to cover, including any stamp duty costs.

Buying an established property: A deposit is paid at the time specified in the purchase contract. Your lender will assess the property before giving final loan approval, and the balance of the purchase price is paid at settlement.

Building a new home: You may pay a deposit for the land and a separate deposit under the building contract. Your lender will need details of the land, plans and building contract before finalising finance. A construction loan works differently to traditional home loans. It generally releases funds in stages as work progresses, rather than paying the full building cost at once. Ask what your repayments could look like during the build, especially if you’ll still be paying rent.

Building versus buying: How soon can you move into your own house?

If you're eager to move or get out of the rental market, buying an existing home could be faster depending on whether something suitable is available in your area, finance and settlement period. However, depending on the state of the market at that time, it may take time to find an existing property that suits your needs. It may be faster and more convenient to buy a brand new house that's ready to move in.

Buying an established property: If you’re eager to move, buying a existing home can be completed in around 30-60 days if everything falls into place quickly. Once you’ve found the right property and signed a contract, allow one to three months for settlement. But finding that home can take time, and you’ll still need to organise finance, inspections and conveyancing before settlement.

Building a new home: Allow time to secure land, choose your design and finishes, and finalise finance, contracts and approvals. The building process itself can then take around six to 12 months. Building on untitled land may add further time before the construction process can begin.

Insider tips from our team

• If you're looking for a new home that's ready to go, check out our brand new homes for sale. Available in both single and double storey designs, our newly built houses for sale are meticulously crafted and ready to move in.
• Did you know you can start building sooner with us? If you’re working to a tight timeline or chasing certainty, Start Building Sooner is designed to speed up the buying process so you can move faster.
• With our Q Collection homes, eligible buyers can get started with $5,000 upfront and get to site in as little as 10 weeks (conditions apply).

Creative freedom and flexibility

It goes without saying, building your own home will grant you a lot more creative freedom and expression while buying an established house means inheriting someone else's choices from years before.

Building a new home gives you the chance to choose high quality materials and all the features from the outset. You get to choose the colours, materials, appliances, and finishes that you would have otherwise had to replace when buying a home.

Should this be your forever or long-term home, paying more attention to the details can help you achieve your dream home without breaking the bank.

Energy efficiency and long-term savings

Under the National Construction Code, new homes in Queensland generally need to meet a minimum 7-star energy rating for the building shell. This encourages energy efficient design from the outset, with features such as insulation, window placement and shading helping to keep the home comfortable with less heating and cooling.

Good access to natural light can also reduce the need for daytime lighting. Together with energy efficient technologies, these choices can help lower energy bills over time and reduce the home’s environmental impact. Ask your builder about energy efficient options, including all electric homes and solar systems.

An older home may have higher energy and maintenance costs, depending on its condition and any previous upgrades. Before buying, check its insulation, windows, hot water system and heating and cooling. You may be able to add energy efficient technologies later but those upgrades come at a cost.

Maintenance and repairs in older properties

An established home may be ready to move into, but maintenance issues and repairs can bring unexpected expenses. The roof, gutters, plumbing, wiring, hot water system and air conditioning may all need attention over time. A building and pest inspection can help identify issues before you buy, though it may not reveal every problem or predict when something will need replacing.

Think about the floor plan, too. Changing a layout that doesn’t suit you can be time consuming, and cost tens of thousands of dollars, especially if it involves moving walls, plumbing or electrical fittings.

What’s the verdict?

Take a closer look at your future plans for this house. *Are you buying it to sell later on? Are you focused on capital growth potential? Are you just trying to get into the market? Is this your forever home?*

• If your priority is getting into the market, compare the total cost of established homes and new builds in areas you can afford. First home buyer grants and concessions may make a new home worth exploring, while an established property may give you more options in a particular suburb.
• If you need to move soon, an established or completed new home may suit you better.
• If you’re planning to stay for years and want a floor plan designed around your needs, building gives you more say in the home you’ll live in.
• If capital growth is a priority, research the location and property carefully whichever path you choose.

The option you end up going for ultimately depends on what you prioritise. Weighing your options and knowing the wins and trade-offs for each should help you come to a decision. Remember that there is no one option better than the other, only what’s right for you at this point.

Ready to get started with a brand new home?

As Queensland’s builder of choice for first home buyers, we offer affordable new home packages for smaller budgets, upfront pricing and the peace of mind that comes from building with a trusted house builder backed by a $10 billion parent company.

Created for first home buyers, our Q Collection features family friendly floorplans, generous inclusions and a choice of single and double storey designs to help first home buyers get into the market faster.

Our streamlined process means you can start building faster and you’ll get comprehensive support throughout your entire home-building journey.

Contact us on 07 3290 8888 to get started today.