Your browser is out of date. From Thu 28 April 2022, the Great Southern Bank website will not support your current browser, and you may have a degraded experience or be unable to connect. Update your browser to secure your online experience.


Should you build or buy your first home?

06 November 2020
Share article on Facebook Tweet this article email this article to a friend

Should you build or buy your first home?

The pros and cons of building or buying your first home

2020 has made us all look a little more closely at where and how we live. Being stuck inside our homes and apartments more than usual this year (thanks COVID!) has us wanting more from the spaces we live in.

Whether it’s a better home office set-up, home-schooling zone, or a garden to relax in, the idea of ‘home’ has evolved with the changing times of the ‘new normal’.

Finding a home that ticks all these extra boxes (and that’s in your budget) is the big challenge for first home buyers, with many asking the question: should you build or buy a house? So, to help you make your decision, we look at the pros and cons of building vs buying a home.

Pros of building a home

Make it all yours

When you build your home, you can take personalisation to a far greater level than buying a house that someone else has built or decorated. With building, you get to choose the land, the builder, the design, and all the finishes – from carpets, wall colours, to kitchen appliances, etc... If you want a specific floor plan or design to suit your tastes, your imagination can run wild. It will all just depend on your budget and what’s possible from an engineering perspective. Choosing your own finishes and appliances also provides greater peace of mind, as the items are brand new and covered by a warranty.

Government assistance

To help first home buyers with some of the costs of building a home, state and federal governments offer a number of financial grants and schemes. These include: 
* First Home Owners Grant (FHOG) – Administered by the states and territories, payments and eligibility criteria may differ, with at least $7,000 available for home builders.

* First Home Loan Deposit Scheme (FHLDS) – Initially introduced to combat the impact of COVID-19, the scheme helped first home buyers build or buy a home with a smaller deposit. The Australian Government announced in the 2020-21 Federal Budget an extra 10,000 places for the 2020-21 financial year. This latest allocation is specifically for the purchase of new homes.

Having a sustainable, greener home

Building a home not only allows your personal style to shine through, it also means you can choose more energy efficient materials and options that help you save money and the planet.

Cons of building a home

Longer wait time to move in

Building a home takes time. From when you find land to build on, buy it, consult with a builder, choose a home design, ponder over finishes, construction, inspections, yada, yada, yada, six to 18 months may have passed before you’ve moved into your dream home. On the other hand, buying an existing home takes significantly less time. And what’s worse, you’ll find yourself paying more rent if you build, as you’ll be waiting longer for your new home to be built – all that rent money could be going off your mortgage!

Funding construction

Building a home takes time AND money. Financing your dream home may require a special type of home loan called a construction loan. Typically, these loans periodically release funds to your builder based on the contract. You should know that there are some things to consider when you compare them with average home loans. Generally, construction loans have higher interest rates, charge higher fees, come with more restrictions (less features) and require a larger deposit. Note that some lenders won’t even lend for any new constructions, which may limit your options as well.

‘The Uncontrollables’

While you may have more control over the things you want in a home, the construction process comes with its fair share of uncertainties. Bad weather can wreak havoc with your builder’s schedule and your plans to move in on time and within budget. Other delays that can impact the cost and completion date of your new home include fixing up any poor workmanship, equipment failing, not to mention waiting for council approvals.

Living away from the city

Unless you have a big enough budget to buy an inner suburban block of land that’s been subdivided, or an older home to knock down and build (council restrictions permitting), you may find your search gets restricted to newly released land that’s further away from the CBD. If you need to commute to the city for work this may be a problem – although COVID has shown how many people have successfully learned to work from home.

Pros of buying a home

It’s more convenient

If COVID has shown us anything, it’s that EVERYTHING can be bought online. Buying a home can be done remotely from your couch (although not advised) – online search, virtual tours, emailed offers and online loan applications. Depending on the amount of time needed for settlement, you could be moved in within weeks.

Buy wherever your budget allows

Do a quick search on any of the big real estate websites and you’ll quickly find there are far more built homes for sale than vacant blocks to build on. You’ll also see that the vacant land that is available is usually restricted to outer lying areas. Established homes can be bought in most areas and is only really restricted by your budget.

Lower financing costs

As mentioned, construction loans for new builds come with higher interest rates and fees than home loans for existing houses. There are also more lenders offering a greater variety of home loans (variable and fixed home loans) that come with more features. To see what the costs of borrowing for a home are for you, check out our home loan calculator .

Cons of buying a home

Nothing is brand new unless you renovate

Depending on the age of the house, there will be a level of wear and tear on the home. The older the property, the more wear and tear. It  can be cosmetic and easily fixed with a coat of paint, or structural damage requiring extensive work (and money).

Higher energy/maintenance costs

Established homes can come with higher energy and maintenance costs. Unless the home has been completely renovated, it will still have the original materials and design principles in use at the time of building. For older homes, poor insulation and a lack of energy efficient options can quickly translate into big electricity bills. Older, hazardous building materials, like asbestos, may also need to be professionally removed if you intend to do any renovations which can add to your costs.

Features of the time

Homes are usually built around the needs of the people living in them at the time. This means you usually won’t find Media Rooms or other mod cons in many older homes built early in the 20th century. That said, kitchens and bathrooms can be updated – but at a cost.

Whether you build or buy your first house, comes down to a number of key factors. These include your personal choice on design, the cost of building, your budget and how much you can borrow . Ultimately, it’s weighing up what matters most.

Home Loan Enquiry Form

Submit a Home Loan Enquiry Form and one of our Home Lending Specialists will be in touch with you to discuss next steps in your home buying journey.




Related articles
How do Green Loans work
4 minute read
How to save for a house deposit
6 minute read
Home ownership may be closer than you think
3 minute read
The First Home Owner Grant - a simple guide
Your guide to refinancing your home loan
6 minute read
Your guide to switching to an electric vehicle
7 minute read
All Articles
Share article on Facebook Tweet this article email this article to a friend
Speak to a Home Loan Specialist
1 of 8
Speak to a Home Loan Specialist
Tell us what you're looking for and we'll be in touch
I'm buying a property
I'm building or renovating
I'm refinancing
Discuss my Great Southern Bank Home Loan
None of these
What stage are you at?
I'm ready to apply for a home loan
I'm applying for pre-approval
I want to know if I qualify
I'm researching my options

Applying for pre-approval allows you to know the maximum amount you can borrow while you look for a property.

Pre-approval means that a lender has agreed to lend you an amount of money in-principle, but the loan hasn't been proceeded to full or final approval.

While pre-approval is not a fully approved loan it can help you narrow your search, negotiate, and make an offer with certainty and confidence.

How much would you like to borrow?
If you are unsure, please enter an approximate amount.
The minimum amount you can borrow is $100,000
When would you like to borrow?
If unsure, please select an approximate timeframe.
Within 3 months
In 3+ months
Are you a Great Southern Bank customer?
Great Southern Bank was previously known as CUA.
Do you have a home loan with Great Southern Bank?
Great Southern Bank was previously known as CUA.
Would you like to tell us anything else?
For security, never include any bank account or card details in your enquiry. You can provide this information later if it's needed.
Skip this step
Tell us a little more about your plans
I'm planning to build
I'm planning to renovate
What stage are you at?
I'm ready to refinance
I want to know if I qualify
I'm researching my options
How much is your current mortgage?
Please enter a numeric value
What are your plans?
I want to increase my existing home loan
I want to switch or restructure my existing home loan
I want to discuss my existing home loan
What would you like to discuss?
Please provide a little information so we can best answer your query.
For security, never include any bank account or card details in your enquiry. You can provide this information later if it's needed.
How would you like to connect?
Request a call back
Call us on 133 282
Chat with us online
Speak to a Home Loan Specialist
First Home Guarantee
Family Home Guarantee
Regional First Home Buyer Guarantee

The Australian Government has introduced initiatives to support eligible Australians to build or purchase a new home sooner: the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee.

Thanks [Name], we'll speak to you soon
One of our Home Loan Specialists will call you on [0413 456 789] at your preferred time.
To help you get the most out of your call, we recommend having some details ready:
  • Identification details
  • Details of your income and expenses
  • Financial details, including what you own and what you owe
In the meantime, if you have any questions, we’d be happy to help.
Call us on 133 282
Mon - Fri: 9:30am - 4:00pm (AEST)
Visit us
Visit your nearest Great Southern Bank branch.
There was an error processing your submission
Please try again
How can we reach you?
Please enter your first name
Please enter your last name
Please enter your state
Please enter valid email address
We’ll email you if we’re unable to contact you by phone
When would you prefer to be contacted?
Opening hours:
Mon - Fri: 9:30am - 4:00pm (AEST)
Great Southern Bank collects personal information on this form for the purpose of assisting with your enquiry. If you don’t provide this information we may not be able to help you. Our Privacy Policy contains information on how we manage personal information, how you may access and seek correction of information we hold on you, how to complain if you believe we’ve breached our privacy obligations, and how we deal with complaints. We store some information in a secure environment in "the cloud" – our privacy policy sets out which countries this information may be hosted in.