The Mortgage Supply Company

David Windler | 27 Apr 2017 | Advice, First Homes

To Buy or to Build?

David Windler | 27 Apr 2017 | Advice, First Homes

To Buy or to Build?

To Buy or to Build?

To buy, or to build, that is the question.  If you are ready to make the big move, you will be faced with many important choices. There are pros and cons to both options and they should be carefully evaluated before committing to your next chapter.

Advantages to buying an existing home

There are two primary advantages to buying an existing home: convenience and costs. Once you have found your dream home and settled, you are free to move in right away. The convenience of what could be a speedy process is compelling to many people when it comes to deciding whether to buy or to build.

The cost of a house will vary significantly depending on demand, method of sale and current markets. You may secure a house for under is market value if it has little interest from other buyers. This is particularly beneficial if you are flexible about the style and suburbs and are open to renovation. There are extra costs involved, but if you prepare for the process beforehand, you can avoid any nasty surprises. Your mortgage broker and agent can advise you on the likely costs. They may include:

Housing inspections


Building report

LIM report

Legal fees



Moving Expenses

Sale and purchase agreements

A big advantage to buying an existing property is the security of a sale and purchase agreement. The legally binding contract provides reassurance to both the buyer and seller as it cannot be changed once it is accepted by both parties. The sale and purchase agreement will include the agreed price and the settlement date.

As well as the security and convenience of buying a house, there are many other desirable influences. The house can be in your chosen area and not where there is land available. Built properties will be closer to towns and schools while land is generally available in less built up areas.

Disadvantage to buying an existing home

The obvious disadvantage to buying an existing home is you may not get exactly what you want. There are many compromises to make when choosing a home: a great garden but only one bathroom, an extra bedroom but the wrong floor plan – older homes in particular may not meet the needs of the modern buyer. If you cannot find a house that matches your needs, you may need to spend additional money on remodeling, repairs or decorating. All adjustments need to be factored into the overall price.

Another big disadvantage in buying is the interest from other parties that you will need to compete with. This could lead to long negotiations, paying more money than anticipated and countless disappointments when you have become emotionally invested in a property.

Building your own home

Building in New Zealand is expensive and every build is different. A quantity surveyor can give you a tight ballpark figure but unexpected costs make it difficult to give an accurate figure of a potential build. When you are getting quotes, you need to ensure that you are comparing the same things. Often cheaper quotes will leave out items that you will have to include later. Allow at least 10 percent for overruns, unforeseen costs or changes to the plan.

Advantages to building your own home

The big advantage to building your own home is you are much more likely to get exactly what you want. You can work with the architects to plan the layout and design to fit your requirements. You can choose the building materials and fixtures for your house which allow for a more sustainable home. This will save you money on energy costs in the long run. Moving in to a brand-new build comes with the knowledge that you won’t need to do any maintenance for quite some time.

Disadvantage to building your own home

Building your own home is not for the faint heated – there are many drawbacks to consider. The biggest disadvantages tend to be the costs and timeframe. Although there are no exact comparison figures, it is generally accepted that it is more expensive to build per square metre in New Zealand than it is to buy.

Fluctuating costs of building materials and arising fees from council opposition may all contribute to the hidden costs of building.

Building a home is exposing yourself to the forces of nature – building may have to be put on hold during turbulent weather. Construction loans and permits may also add to a lengthy process.

Many new construction neighbourhoods and developments are built out of the city zones. It is very rare for a plot to come up in a central location and if it does, it will be at a cost.

There is no right or wrong answer and it will largely come down to the individual’s requirements. Carefully weigh up the pros and cons of both options. Seek professional help before you commit to any project and only choose agents who have a proven record in their field of work.

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