After you have made the decision to begin your journey to property ownership, it is time to make a decision on whether to purchase an existing house or construct one. Each option has its advantages but your priorities will determine which one is best.

Which method works best for you? Let’s dig deeper.

How to build your new house: The pros

The buyer who builds their home from scratch enjoys many benefits that aren’t available to those who buy an existing property. These benefits include:

1. You can personalize your experience

You have the ability to personalize your home. You have the option to choose the number of bedrooms, bathrooms, size of your kitchen and location of the fireplace. You can even add unique features – such as a home cinema or an indoor pool – if your funding permits.

You can also select higher quality materials to lower maintenance costs. By choosing energy-efficient alternatives, you could save thousands of dollars in electricity and gas.

2. Access to state-based grants

First-time homebuyers may be eligible for the First Home Owners Grant. It can increase your funding, even though the amount will be different depending on where you live. Additionally, you will only need to pay stamp duty for the land – not the house – saving you thousands of dollars. These concessions are also available to homebuyers who have not lived in the property before.

3. Avoid the bidding battle

It doesn’t take much time to bid on auctions or deal with agents. You’ll generally find less competition when buying a block of land or land than you would when buying an existing home.

The pros and cons of building a new home

There are many benefits to building a home. These benefits include:

1. It takes a lot to complete.

Constructing a home takes time and delays due to unforeseen circumstances – such as inclement weather, poor workmanship, or late council approvals – can make your wait even longer. Some lenders have completion dates that vary from six to twenty-four months.

2. Complex construction loans are not possible

A construction loan works differently and is more complicated than a standard home loan – which is often used when purchasing an established home – for several reasons. A property that is being constructed from scratch may have a higher value. This could result in higher interest rates.

Advantages of purchasing an established home

Because of the convenience and ease they provide, many home buyers prefer to live in existing properties. Here are some benefits to buying an existing property.

1. It’s faster

It can be easier and faster than you think to purchase an existing property. It takes just a few weeks from the signing of the conditional agreement until settlement. This allows you move in to your new home quicker.

2. Prime location

Existing homes are usually located nearer to the center of a city. This means that they have greater amenities like schools, public transport, and other services. Additionally, these houses often sit on a larger parcel of land – meaning they have nice-sized yards – compared to new builds.

3. Simpler financing

Standard home loans often require a 20% deposit, but most lenders will allow you to borrow up to 95% of the property’s value provided that you pay lenders mortgage insurance. Traditional home loans are easier to apply for and offer more features and options than construction loans.

What are the pros and cons of buying an existing home?

Although buying an existing property may allow you to move in faster, there are still some things you need to consider.

1. Wear and tear

If you plan on buying an existing home – especially those where the owners have lived in for years – expect to find some signs of wear and tear. Depending on the type and extent of repair needed, these can cost anywhere from a few hundred dollars up to several thousand of dollar.

Older properties may not have certain features you are looking for in a home. There may be heating or electrical systems in older homes that aren’t up to current energy efficiency standards.

2. Grants that are state-based

State governments have strict requirements regarding access to the FHOG. Buyers of established homes need to choose brand new properties – meaning no has lived there before – to be able to access the grant. This grant is not available to those who purchase older properties.

Is it cheaper to buy or construct a house?

Because of the many factors involved, it can sometimes be difficult to decide if building your home is more costly than buying an existing property. Finder and Savings was able to compare both using different parameters. These results were mixed.

You can get an idea of how much each option might cost by looking at the tables below. The first table contains the average home prices in all capital cities based on CoreLogic’s latest data while the second table shows how much it costs to build a standard double-brick home in five state capitals based on BuildSearch’s most recent data. The last table contains the median lot prices in Australia based on the Urban Development Institute of Australia’s (UDIA) 2020 State of the Land report.

Average house prices

Metro area

Median value

















Capitals combined


Combination of regional elements




Proposed new home cost estimates

Metro area

Basic Finish $ Per Square Meter

Medium Finish $ P/Sqm

Luxury Custom $ Per Sqm





















Average prices of vacant land

Metro area

Median value













National average


These numbers are just a few of the many things you should consider when making a decision about whether or not to buy or build a house.

Purchasing an established home, for example, involves several upfront costs – including deposit, loan establishment fees, stamp duty connection fees, and legal charges – and ongoing costs – including mortgage repayments, land tax, council rates, body corporate fees, and maintenance costs.

If you’re building a house, it is important to consider costs such as site costs, soil testing and flooring.

It’s not about how much it costs to build or buy a house. It’s about your family’s quality of life. You can make your own home, or use an existing home that offers convenience. These benefits are difficult to quantify, but can greatly improve your quality of life.