Build or buy: Which is my best option in the Murraylands?
Raine and Horne Murraylands’ Michael Cox walks you through some of the pros and cons.
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If you’re looking for a new home, traditional wisdom might tell you that it’s cheaper to build than buy.
You have to wait a bit longer to move in – maybe 12 months – but you’ll end up ahead.
But is that true any more?
A lot has changed in the Murraylands’ housing market in recent years, with prices surging and properties being snapped up quicker than ever.
Here to break down the buy versus build debate is Raine and Horne Murraylands’ senior property consultant, Michael Cox.
Timing
The biggest issue you’ll need to deal with as you decide whether to build or buy is time.
With housing in short supply all over Australia, builders are very much in demand and it may take a lot longer than you expect to get a house built – think two years or more.
If you buy land in one of the new subdivisions around the Murraylands, there may be additional delays before you even reach the start line with a builder, while you wait for developers to build the infrastructure that will give you access to your block.
“It can be up to three years from signing a land contract to moving into your home,” Michael says.
“We get a lot of people start to consider (building) and, as they do their homework, go ‘nah, I’m just going to buy established’.”
Are you willing to keep renting, or paying your existing mortgage, for three more years?
Or would you rather move into a place sooner?
Availability
One issue common to both vacant land and established housing is this: there’s not much around.
We now live in an era when houses are typically sold within days of going on the market, and even major land releases like Narooma Rise are completely taken up within a few weeks.
The Murraylands’ housing shortage has been well publicised, but Michael says you might be surprised to know how little land is out there, too.
“Land is very, very difficult to get, and the bulk of the land you can get is through estates and land divisions,” he says.
While the delays associated with a subdivision can be frustrating, there is an upside, Michael says: you can use that extra time to work with your builder or architect on a design.
That way, when you get through settlement, you’ll be ready to lodge a development application with the local council and start building soon afterwards.
Costs
Is building still cheaper than buying?
House values in regional South Australia have increased by 68 per cent since 2020, according to industry analysts Corelogic, but land has risen at a similar rate.
Where once you might have found a decent-sized block in Murray Bridge for $60,000, now it might cost $200,000.
Add on the cost of building a home – which has also gone through the roof – and you’ll probably come out about even, Michael suggests.
The real difference will come later: in your new home’s resale value.
“When you’ve got a much newer product for resale, the actual finished value (of your home) is going to be greater,” Michael says.
Another cost-related consideration is stamp duty.
You’ll pay thousands of dollars less tax – potentially tens of thousands – on a vacant block than an established home.
Finally, think about the costs you might not have considered: the renovations or maintenance an older home will need, and the shedding and landscaping that will have to be done around a new home.
“That’s one of the things I see a lot with vacant land, particularly larger family properties: people max themselves out on the home and go ‘I’m going to landscape it myself later’,” Michael says.
“But fencing might be $10,000, and a shed that’s okay might be a $40,000-50,000 process.”
Personal preference
The biggest advantage to building your own home, of course, is that it will be just that: your own home.
You can pick the features, materials and layout you want; and adjust a design to suit your budget and the lay of your land.
“(You can) be involved in the design and the colour tones and the room sizes ... and know, the minute you step in, that nobody else has used that shower, nobody else has used that kitchen, it’s brand-spanking and it’s yours,” Michael says.
“That’s a really exciting thing for people.”
Unless you’re extraordinarily lucky, an established home might take a bit of work: a fresh coat of paint here, a dishwasher there.
The benefit, though, is that you can physically walk through it before you decide to invest in it: “you can touch it, you can feel it, you can get the building inspector to make sure everything’s all good, you know exactly what it’s going to look like”.
Not everyone wants to live in a subdivision, and not everyone is able to make a decision about the place they’ll spend the next chapter of their lives based on a concept image.
So is it better to buy or build in the Murraylands right now?
Let’s circle back to our original question.
“I don’t think it’s cheaper to build any more,” Michael says.
“Build costs have gone through the roof in the last few years, and land values have gone through the roof as well.”
Ultimately, though, his advice is that there are advantages both ways.
“It’s not about which is better,” he says.
“It’s about which is better for an individual, based on the pros and cons.
“Everyone’s different.”
- More information: Visit www.raineandhorne.com.au/murraylands, call 8532 3833 or drop into the office at 4 Seventh Street, Murray Bridge. Or, for information on buying your first home, visit moneysmart.gov.au.
Advertising to more than 20,000 highly engaged locals can do wonders for your business. Call Murray Bridge News’ Jane Intini on 0418 835 768 or email jane@murraybridge.news.
Peri Strathearn
