The process of building a home and growing a baby are not so dissimilar.
How long does it take?
After you’ve saved for stamp duty and a deposit, secured land and loan, the journey of creating a new home averages about nine months - give or take. And just like parenthood, building a home from scratch, the trials and rewards are part and parcel of the journey.
Finding the one.
Like having a baby, finding a reliable partner to embark on this journey with is an important factor. As far as you’re concerned, your builder has three key roles: complete the job on time, on budget, and without major problems.
- Who do your friends, family and connections recommend? Seek social proof.
- Ask tradespeople, designers and architects for their opinion too. Reputation is everything.
- Get ‘googling’ to see if the builders you’re considering have stellar reviews. Star ratings!
- If there’s nearby evidence of their previous work, make time to see it. The proof is in the building.
- Cross reference your findings with the Housing Industry and Master Builders Associations online.
The whole package.
Depending on how personalised you want your new home to be, house-and-land packages are one (very popular) option. These packages are every bit as eligible for incentives like HomeBuilder and some very attractive pricing options are available.
Knocked (up) down.
Perhaps you own the land and love the location, but want a new home on it. That means you’re opting for what we call a “knockdown and rebuild”. Your home loan will be slightly different to a house-and-land package project or a land purchase and bespoke build.
So you’ve got the land, but not the house. If the land is registered you will begin by making mortgage repayments against the land loan amount. As construction starts on your property the bank will make progress payments to the builder and your mortgage repayments will go up each time a progress repayment is made. If the land is unregistered you will need separate loans.
- Custom build or project home
- Location, land and loan
- Finding the builder
- Finalise the budget
- Approve the schedule
- Sign the contracts
- Monitor the progress
- Meet the milestones
- Collect the keys
Remember the Baby Bonus from 15 years ago? Well, now there’s kind of a Building Bonus. $25,000 is available for those building a new home + $10,000-$20,000 is available in most states for first home buyers + $10,000-$20,000 is available in building grants in Tasmania, NT and WA + thousands and thousands saved through stamp duty concessions in most states.^ Did you know $10,792 is the average stamp duty paid in Australia in 2020?*
When you choose a builder, use this checklist before signing on the dotted line:
- Seek licences - builder's licence name and number?
- Confirm flexibility - are they willing to make changes?
- Payment methods - amount upfront, set schedules?
- Get proof - can you visit a recent build or two?
- Oversight - who’s the qualified supervisor?
- Insured - are they covered for all liabilities?
- Schedules - when will work start and end?
- Total cost - how do their estimates work?
- Progress - which milestones trigger payment?
The juggle is real
The upsides of building a home, from energy efficiency to personalisation, are offset to some extent by the processes involved; these are many times greater than buying a ready-to-go house. They say building a home is like having a baby; once it's all over you forget about the ordeal.
Let your Loan Market broker be your “midwife” in making this miracle happen.
*Source: UDIA, Stamp Duty Calculator Australia through stamp duty concessions.
^Some eligibility criteria applies