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Is it cheaper to build or buy a house?

Is it cheaper to build or buy a house?

Are you ready to take your first step into the property market but are not quite sure if it’s cheaper to build or buy a house? This can be a tough question to answer, and a lot of the time it will come down to your individual needs and wants. We’ve put together some pros and cons to take into consideration that may help your decision further along.

Buying an existing home:


  • Moving in is much faster; in a lot of cases, settlement can take as little as 30 days.
  • Often, buying an existing home means having an established neighbourhood. This means that you’re more likely to be closer to schools, shopping centres, work and public transport which helps to reduce travel length and give you more free time
  • Those building a home often overlook the cost and time needed to put in a garden to go with their new home. Buying an existing home can reduce these costs by having an already established garden with a lawn.


  • Probably the biggest downside to buying an existing home is that you will have to compromise with areas of the house that you may have designed differently had you built it. You need to weigh up which areas you are willing to compromise and if it is best for you.
  • Turning an existing home into your dream home can often become quite expensive with renovation costs. Make sure you consider the future changes you may want to make to the house and what this may cost.

Building a new home:


  • You’re able to save costs on stamp duty as you’re only paying duty on the land.
  • Depending on what state you live in and your personal circumstances, you may be eligible for the First Home Owners Grant.
  • One of the most promising and appealing aspects of building a new home is the level of personalisation you’re able to do. You can design a home for your needs and lifestyle, without having to compromise if buying an existing home.
  • Many new homes built today factor energy efficiency into the build plan. In this day and age, there is an enormous amount of options available to build a home that is better for the environment, while also saving you money in the future on bills.
  • With a new home you’re less likely to have maintenance issues as the home is built with fresh materials. However, if problems do occur, you’re likely to be covered under warranty. 


  • Building can take a long time. Often, you will be looking at 4-12 months, if not longer to build a home.
  • While your new home is being built, you still need to have a roof over your head. You may have to rent a house or make costly financial arrangements elsewhere while in production, adding to the cost of building your new home.
  • A big issue with buying vacant land is that it’s rare to find land close to city centres. You may have to instead, compromise on convenience and see an increase in your commute time.
  • Costs are not fixed. You may encounter a number of unavoidable issues like changes to the building plans, additional materials needed and the like, when building, so keep this in mind when looking at if it’s cheaper to buy or build a house.

No matter whether you’re deciding to build or buy a house, when you’ve made your choice, don’t forget to consider our mortgage protection insurance. Most plans pay the lender, but here at ALI Group, we pay you to help protect your ability to meet your mortgage commitments.


Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSG 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement when deciding if this product is appropriate for you.

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