Building vs. buying: What’s the best for first-home owners
When you’re starting to think about buying your first house, this is a question you’ll almost certainly ponder: should I look for a house for sale in the Adelaide Hills or buy land and build a property? With a region like the Adelaide Hills and Fleurieu Peninsula, where the land size is larger than metropolitan areas, you might be sitting on the fence.
Buy or build in the Adelaide Hills?
Building vs. buying a house for sale in the Adelaide Hills and Fleurieu. The numbers. While the property market has evolved dramatically over the past few decades, this is a timeless question. According to recent statistics by Finder (as of May 2018), the median lot price is $220k. The median estimated construction costs are $198k. This is based on a “three-bedroom brick veneer home on a level block of land with a medium finish quality.”
But, then we need to take into account stamp duty. While, in some states, first-home buyers might be in the running for a concession on your stamp duty, in South Australia, this is only for those buying new apartments in the city. The stamp duty on vacant land (assuming median price) is $7,680. Then, there’s the First-Home Owners grant for building. You have access to up to $15k if you choose to construct your new home (valued up to $575k).
Let’s say you do decide to build (a three-bedroom brick veneer house, for example). You’ll probably add another 25% to the end cost to finish off the house. Once we add the first-home buyer grant, your house would total approximately $516,293. Compare this figure to the latest median house price (from Domain), where you’re looking at $533,525 to buy an established house in Adelaide. Then, once we add stamp duty, that price rises to $556,703.
The verdict?
Building your Adelaide Hills house is $40,409.25 cheaper.
While buying a house is slightly more than building ($516,293 vs. $556,703), there’s more to this debate than just a financial perspective. Convenience vs. getting what you want. You might be ready to move into your house now. If so, buying a pre-built property could be the better option. However, there might be things that you have to sacrifice that you initially wanted, such as a spare bedroom or outdoor entertaining area. Choosing to build, you have control over the design.
When choosing between buying or selling a house in Mount Barker, Littlehampton, Nairne, Strathalbyn or any other region of the Adelaide Hills and Fleurieu Peninsula, make this big decision with the advice of a local real estate agent. All real estate Adelaide Hills decisions are also financial and lifestyle choices. Talk to us to create a property strategy that meets your future goals.
