Buying Established Home Vs. Land/Home Package

oliman on 17/12/2016 - 15:34
Last edited 17/12/2016 - 16:51 by 1 other user

Hi all,

These days I am eyeing to buy my first home (as owner occupied) in South Eastern region of Victoria. My buying budget is around $400,000 for a 2/3 bedroom house.

I have inspected many pre-existing homes on auction, and I have also seen a lot of ads for house and land package offered by the builders, where they highlight around $20k of stamp duty savings, 4/6 months building time and First Home Owner Grant.

So from the sound of it, if I buy a house/land package off the plan, I would save around $30k on stamp duty and FHOG, and it would be a brand new house too. Also, some of the good builders such as JG King, Porter Davis have cashback/bonus inclusion offer these days which makes it more appealing option.

But after doing some research, I have come to know the problems with those house/land package such as things not included in package and you realize it later when you start living in the house. Also, people say that they spend around $100/150k extra on a brand new off the plan house after it is built to make it complete.

Can someone suggest which option (new vs. off the plan) will bring more value for money for a person like me who is buying his first home to live in? I am pretty flexible in accepting home designs, suburb etc?

Thanks for reading.

Poll Options

• 5
  House and land package will bring more bang for buck for first owner occupied home buyer
• 9
  Buying pre-existing house is cheaper even when you are first home buyer

• 

  alchew on 17/12/2016 - 15:46

  +1

  Why don't you buy established? I think this option is the best for getting "more bang for buck" even as first owner occupied home buyer.

  • 

    oliman on 17/12/2016 - 15:52

    Yes I had the same idea too..but these days extablished home prices have gone so up in almost every suburb…

• 

  s313 on 17/12/2016 - 15:59

  with the established house there is more chance of getting bigger land,which can be used in future dwelling.with the new house it will be of your choice.you can add options.but again extra expenses like fencing,landscaping etc.you ll have to bear.

• 

  bluesky on 17/12/2016 - 17:21

  +4

  My reason for thinking established home is more than just value: you know what you are getting (with proper inspection reports). With new homes, I have seen first-hand (friend), and read about the nightmares, of trying to get the builder to rectify problems. Not saying everyone will face this, but for the unlucky one, it is another hassle to deal with.

• 

  whooah1979 on 17/12/2016 - 20:00

  $400,000 for a 2/3 bedroom house.

  are houses really that affordable done there? a 2 bedroom unit is about as much we can get here for $400k, and that's 1.5hr to 2hr from the city.

  • 

    ykwon10 on 17/12/2016 - 20:23

    -2

    I live in SE Vic and $400k for 2/3 BR house certainly doesn't exist. Unless 1.5-2 hrs away from Melb CBD….Maybe….

    • 

      nomoneynoproblems on 17/12/2016 - 22:56

      So do I pretty sure you can get a house in Pakenham for around 400k. 50 60 mins from cbd in no traffic. Or Doveton which is 45 max.

• 

  [Deactivated] on 17/12/2016 - 20:08

  I have no idea personally but I had about 10 minutes chat with my superviser (of structural engineering profession) and he said outright that established houses are far cheaper. This kind of make sense based on what you have written and also you should include the usual depreciation of the built material. It is fair to assume that the builders have to pay more money to buy new structural material (including house utilities, fittings, etc.) than the existing home sellers may claim for their used building.
  Probably also depends on other factors but my 2cents…

• 

  Diji1 on 17/12/2016 - 20:40

  -1

  I'm not sure if research will back me up but the way I see it established property is likely the best value if you plan on moving within a short period rather than holding onto a property and paying it off over 10, 20, 30 years or whatever your arrangements are.

  Owner occupiers sell and "upgrade" every 7 years on average in Australia - if you are this person then established should be what you aim for in an ideal world.

  But if you plan to be in it for the long haul then I think buying new likely has much less risk attached to it - risk meaning short term drops in house values which will inhibit you if you plan on selling moving earlier.

• 

  Euphemistic on 17/12/2016 - 22:39

  +2

  New house and land package might be cheaper, but typically they are a lot further away from infrastructure. I'd rather be close to work/shops/facilities in a house that needs some work than save some $ and be stuck out in all the cookie cutter McMansions in the burbs.

• 

  Freitag on 20/12/2016 - 12:09

  +2

  Less unknowns when buying an established house. Also generally speaking land appreciates and buildings depreciate so buying an older home should be cheaper if everything else is consistent. It's a bit like buying a used car, your dollar stretches further because it's not as nice as a new one, generally speaking.

• 

  MikeHunt on 22/12/2016 - 13:14

  If you go the project home route, do your research and go with a 1st or 2nd tier builder. Google to find out their reputation and complaints history.
  Typically the spec of display homes within an estate will be the highest, and will cost commensurately more e.g. $30k+ than the base model.
  Check specification very carefully. The base model homes will economise on everything e.g. minimum no. of powerpoints per room, cheapest kitchens (countertops, appliances, splashbacks etc), no drapes or blinds, no landscaping etc.

  One thing I like about the better project homes as some of them have outstanding energy efficiency / solar design which costs a little more but reduces energy use and running cost. Just a minor consideration.