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First Home Buyer's Guide


Old, new or build - what's right for you?

Here are a few things to consider when deciding whether new, old or building a home is the best option for you.


Government grants

Most government grants and stamp duty exemptions are based on purchasing or building new because in Australia construction is an excellent stimulant of economic growth.


Buying new could be the difference to raising the deposit you need or reducing your lender’s mortgage insurance bill.


Purchase Costs

Purchase costs can vary greatly between old and new; in particular stamp duty.


Most states offer an exemption from duty of some sort to first home buyers, but most offer it only if you purchase new or build.


New properties typically don’t require searches and inspections like pest and building reports.


Construction specific costs

Building a new home can often be cheaper than buying a comparable new built home. However, there are costs associated with this too.


When you build a house you settle on the land first. Then you or the bank make progress payments to the builder for every stage of construction. During this time you’ll be paying interest on the part of the loan that is drawn down which mean you could be paying rent and interest at the same time.


Lender valuations and inspection fees may also apply.


Location & Amenities

Established properties are traditionally closer to city centres. This can be important because typically the closer you are to a city centre the greater the property value.


Established can also be harder to redevelop (e.g. build apartments) which means as demand increases supply can’t keep up so prices rise. With established areas you know what you’re going to get.


Master planned communities and development in growth corridors can offer far greater amenity than their neighbouring established areas. New development areas like western suburbs of VIC, NSW & QLD typically have new schools, parklands, public transport and other facilities like childcare, shopping and entertainment.


Pro tip: considering construction? Ask your advisor to estimate what your mortgage payments will be during the construction period.



Before the bank will give you unconditional approval, they’ll first want to value the property to make sure it’s actually worth what you’re paying for it. If it comes in low you’ll either have to make up the difference or buy elsewhere.


New properties will often be the victim of low valuations. This can be because there are not yet any comparable resales in the area yet, the valuer just doesn’t like new property or you are in fact paying too much for what you’re getting.


Established properties will traditionally value up except where it is an unusual property, the market is turning or you did in fact get a little carried away with your final offer.



Do you like the idea that you’ll be the first person to ever use your bathroom?


Most new home builders and apartment developers will allow a little to a lot of customization. Apartments builders will allow you to choose colours, materials and in some cases appliances.


New home builders typically allow all that plus the ability to customize designs, move walls, extend rooms and even increase ceiling height or roof pitch. Want to add a butler’s pantry and have the money to pay for it? - no problems!


With established homes you get none of that BUT you do get to walk through the home before you buy it. If the builder doesn’t have that design on display you will need to use your imagination.


Adding value

In this department it’s one ball. Buying land and building is in essence improving the value. Do the landscaping and finishing touches yourself and you could add a lot of value to your home.


Similarly, some hard work and lots of lost weekends work could see you add a fortune to the doer-upper you purchased. Adding rooms, opening space, new bathrooms and kitchens can all add enormous value to a property.


Purchase process

Buying established means joining the conga line of open homes, dealing with real estate agents and braving public auctions. Even if you find what you want you may find that someone wants it more than you and is willing to pay more.


Buying new typically means paying the advertised price and dealing with sales people who want to serve you rather than the other way around. Negotiations are typically restricted to throwing an upgrade here or there.


Pro tip: Ask the builder to show you newly built or near finished homes for similar customers. Any builder can make their display look good but fewer actually build a good home.

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