To buy or build your new home?

Let's say you've gathered enough funds to finally enter the housing market on your terms and you’re wondering whether to build or buy. Or perhaps you already have a site in mind and want to weigh the design and build versus buy factors before wading in.

What are the stats saying? In March, the EBOSS Construction Q1 Supply Chain Update showed the cost of building products had jumped by 34% year-on-year, with suppliers expecting costs to rise a further 11% in the next six months.

On the other hand, analysts are predicting that Auckland may closing in on the ceiling for house prices. This forecast is reinforced by data from Barfoot & Thompson which shows average house prices in Auckland during the month of April dropped from $1.23 million to $1.21m, while the median dipped from $1.81m to $1.41m.

Another factor to consider is that many banks are offering a variable interest rate for new builds of about 2% (compared with 4% for existing home mortgages) since a bank's loan-to-value ratios do not apply to new builds.

So, when considering these options, nobody could blame you for thinking that buying may be a good option. After all, the price of housing is falling while construction prices are rising.

But the truth is, these dynamics are still a very long way from equilibrium.

Is it cheaper to build?

The answer is that it depends on what you want. If you are happy to spend more than a million dollars for an older house that ticks most of your boxes – but not all – then buying may be an option for you.

However, if you want a brand-new house built to your specific needs – a house that ticks all your boxes and then some – then building is without question the more exciting alternative.

New builds are almost always designed to highly personal specifications, so the final cost for construction of a new build house depends on many variables. Will the house be a basic bungalow, or will it have ten rooms and seven bathrooms? How you answer those questions will have an enormous impact on the final cost of the build.

This final tally is also determined by whatever site and engineering works may be needed, along with the outright cost of the land, the design, all those council consents and legal paperwork.

Site specific and bespoke

If you already own land, or you have identified land you would like to purchase, there may still be various challenges. For example, is the land steep or sloping, a narrow strip or difficult to access? These factors will influence the design of a home.

Maddren Homes has years of experience in helping people like yourself build dream homes by optimising the available land.

Overall, building your own home remains the unbeatable option for ticking all your boxes – rooms, bathrooms, layout, flow, and entertainment. It allows for the design of a space built to your unique needs. Buying a house will never be quite as personal as building your dream home.

If your heart is set on a new build, nothing beats that “brand new home feeling” – particularly when you helped bring it to life.