Perth: Buy & build? Or buy established property? Which is the best option?

[Jaybay]

Hi all,

 

My family and I arrived in Perth in Sep2011, so have been here around 18 months. We are renting at the moment, NOR and pay $430/ week for a reasonable 4x2 house. Our aim is to purchase a property, but we really have no clue which direction to go in.:wacko:

 

I reckon our budget would be around the $400k mark, and I know that to get a decent house in a decent area, we wouldn't get much for our $$$$.

So: the question is... Do we try find an established property that might need some work? OR With all the development going on around Alkimos/Shorehaven/Yanchep, is it better to try get a house and land package? I have seen some places advertising house and land $375k.

 

my wife would prefer to buy established, as the older houses usually have more land/garden, compared to the new builds that are practically semi-detached, they are so close to each other. My concern with this, is that all the money will be spent on the repayments, and there will be nothing left over to do any possible renovations or cosmetic work.

Whereas Buying and building...you can set it all up right from the start exactly how you'd want it. Or so I believe.

 

Its all just doing my head in!

 

If anyone out there has done a house and land package, please can you share your views on doing it this way? Any hidden costs? Was it what you were hoping for? Were you happy with the finished product?

Any advice or info will be hugely appreciated.

 

thanks in advance,

Jay

[Maruska]

Hi,

 

I can`t advise you about Perth at all but just wanted to say that what matters most is the location of the property. A lot of new developments take a while ( years) to biuld up the infrastructure that established suburbs already have. Property value is another thing to consider - properties in older, established neighborhoods tend to hold their value better than new developments in general, do your research and see how it applies to your area. Don`t know if a particular school district is something you want to keep in mind.

New build - I can see where you`re coming from, everything is done as you like it, no repairs, no cleaning up 20 years of grime from a garage etc. I am interested what Perth peeps have to say, hopefully someone will be along soon :biggrin:.

[moirclan]

the one good thing about buying established is that you just move in , where as building you have to pay your rent and part mortgage payments which can be a killer , when my daughter built a house in butler we went right through the plans we took the wall and door out of the ensuite bathroom and gained some money back , every plug point we changed to doubles and triples where needed as this all costs to put right later , where she wanted french doors we got the builder to put in the frame and we added the doors our selves later , every change you made after the initial consult was about three hundred dollars per change , so you need to check your wants and needs and get it right first time or it becomes costly.

i also suppose it depends on how handy your are if your buying a house to renovate at a later date , as using trades men for every thing is expensive ,

also remember that a builder allocates so much money towards site costs and if it goes above their allowance you pay the difference , i knew some one who built in the hills and their site costs were twice the amount allowed so they had to come up with a lot of extra money as there was so much clay on the block

i think if i was building a new build i would look for a block near services such as trains , freeway access etc butler is connecting to the train line soon i think , and they have the new estate catalina being advertised , i suppose those things matter depending on where you work .

all the best with your decision xx

[Jaybay]

Maruska & moirclan

 

Thanks for your replies and advice, much appreciated.

 

We are actually on the border of Butler ourselves at the moment, so have a pretty good idea of what an up and coming new suburb could look like.

With regards to all the hidden extras, thanks for telling me about the extra charges for EACH change made at a later date! I never knew about that, so defo something to keep in mind...

 

I'm hoping one or two more people might reply on this post with their own experiences, good or bad, and we can start weighting up a few things.

 

One thing I DID forget to ask was: Can I buy a piece of land on a development, and NOT build straight away? Is there a time frame that the building has to be complete, or is it something that can be delayed for a year or two.....? Do you by any idea?

 

Cheers,

jay

[nicolac34]

I can only talk about our experience and our reasoning, but we went for a house in an established suburb over a new build with a similar budget to yourselves. Reasons being:

 

Wanted to be in an 'established' suburb, one already with facilities such as shops, bus stops, train station not too far, doctors, dentist etc

The block was far bigger than we could buy with a new build (700sqm)

We wanted to be closer to Perth than buying on a new estate would allow us (for the money we paid)

The houses have some distance between them, we don't feel ontop of our neighbours

 

The cons with this over a new build is that we will have to do some work to the house. But it's in perfectly good condition as it is, it's just about personal taste and decoration - which we will get around to doing bit by bit.

[Incata]

We have just bought an established house (NOR), for the simple reason that it was cheaper, and on a larger block, than we could have got with a new build further out.

 

We looked at the new estate (Iluka) and they wanted $925k for a new build on a small plot of land (smaller than we bought). This was for a 4 x 2. They said the land was $525k and the house on it was $400k. We were really shocked as you can buy something beautiful in Hillarys for that price, on a larger plot of land. The whole sales pitch was that nobody has lived in it before but to me that wasn't a bonus when they wanted that much money for it.

 

We are in exactly the same position as nicolac34 and bought for the same reasons. It strikes me that the developers are being hugely greedy and their asking prices are out of sync with what is going on and prices in the rest of the residentlal market in Perth.

[Jaybay]

Thanks, cshowell.

It's great to get a feel of what other prospective buyers are dealing with, and also what previous folks have experienced.

Thanks for replying.

Regards,

Jaybay

[newjez]

You could do both - buy a small three bed on a decent block in an established area. Live in it for a few years, and then extend or knock down and rebuild.

[Phoenix16]

hi we came on a 457,, currently impossible to buy a house without massive deposits!! We very quickly were granted our PR (6 weeks of applying with support of company). Whilst we still owned our uk properties we were anxious to get on lafdder here's so we bought an established house, 1 k from beach in Freo and believed we'd develop it, We've lived in a scrawny 3 by 1 since that we love but realized

we need to wait for the area to develop first, so we've took the plunge and bought a massive plot at port Coogee (700sqm) and were just looking for the right builder, so now any advice on building is very much welcome, in facts all advice!!! It's interesting thwt hubby's thwt can build massive developments seem to loose the knowledge of building small ones, particularly their ownZ,,

[Guest Home Loan Experts]

Hi,

 

Brand new (Land & Construction) - Generally here in Australia land & construction developments are usually further out from the city, hence cheaper overall price for a bigger dwelling in the suburbs. Also, it is best when buying a land and home package that you get a fixed building contract, this way there will be no hidden cost, or any shortfalls throughout the building process. This will avoid you from getting any unforeseen tax invoices from the builders. Furthermore, without a fixed building contract it is more difficult to obtain finance for this. Bank's prefer fixed building contracts.

 

Established homes: When obtaining finance for buying established homes, banks are more lenient with lending policies. Big factor of determining property values is location of property and comparable sales within similar areas. Generally established homes in Australia are well solid built homes. You have the ability to move in straight away in the house, oppose to buying a brand new waiting for it to build for at least 6-12 months. Also, with the build you will have to wear the cost of paying loan interest while your house is being built.

 

So really, it comes down to own personal situation in which transaction of newly built or establish suits you.

[Jaybay]

Home Loan Experts

 

Thanks very much for taking the time to respond - much apprecited.

I believe there is an open day this weekend at Alkimos, with some of the builders, so we might just pop along and see what they have to say.

Thanks again!

 

Regards,

Jay