With property prices skyrocketing across major cities potential home buyers could be flipping the age-old question of whether they would be better off to build or buy their home. Building your own home from scratch can take time, but it does have its rewards. However, the question ultimately stands as to whether Australians prefer to build their dream home instead of purchase it.
Australians caught between a rock and hard place
First-time home buyers who are looking to get one foot onto the property ladder might find it a bit tricky to do. Property prices across Australia have increased with the average median value in a city like Melbourne sitting at $828,720. If you are planning to be closer to the city centre you could be forking out more compared to people who move to the regional parts of Australia.
Building your own house might seem like the next best bet to own a home, but that can be costly and also takes time. Residential construction of property over the previous years has continued to grow, but it still isn’t enough to match the population growth. According to The New Daily, places like Melbourne has an influx of 120,000 people moving into it per annum, but only 75,000 houses are being built.
Aussies try other ways to get onto the property ladder
Building or purchasing a dream home could be a goal that will take more time to accomplish over time, but this is not stopping Australians from looking for alternative ways to get onto the property ladder.
More people are purchasing units and apartments to slowly start them off on the property ladder while saving money that will help them build a sizeable deposit to purchase a house. This is seen in the data released by the Australian Bureau of Statistics (ABS) which recorded a mammoth growth in 155,275 units compared to 69,639 houses that were under construction.
Renting out a unit or apartment might be the new way for Australians to grip the reigns of their finances to eventually save towards a house, but if you are not careful you could find yourself delaying the process of owning a house due to your current financial decisions.
Don’t Jeopardise your chances of owning a home
There are quite a few large expenses that are involved when building a house from scratch. For example, buying a lot in a place like Hobart can cost you a median price of $165,000 and the construction cost can run up to $175,386 which is a total of $340,386.
If you decide to build it is important that you carefully consider the time frame and costs of seeing the project to completion. Although most Australians are taking longer to crack the property market to be proud homeowners, it pays to watch how you manage your finances to secure your house.
The approval of a home loan will be determined on your credit report that tracks how you have been handling other financial commitments such as bills, loan repayments, and credit.
Always remember to build healthy financial habits such as paying your bills on time, choosing a property that does not exceed 30% of your income, and comparing your options for the best rate. Your future self will thank you for it.