Buy Established, New, or Build? Pros and Cons
One of the first big decisions when buying a home is choosing between an established home, a brand-new home, or building from scratch. Each option has its own perks and challenges, depending on your lifestyle, budget, and long-term goals. Let’s break it down to help you make the right choice for you.
Established Home
✅ Move-in ready—no waiting for construction to finish.
✅ Often larger land sizes compared to new developments.
✅ Typically located in more established neighbourhoods with amenities, schools, and transport nearby.
✅ Greater potential for capital growth in high-demand areas.
✅ Can have more character and charm than newly built homes.
❌ May require more maintenance and renovations, adding extra costs.
❌ Older homes may have higher energy costs due to outdated appliances or insulation.
❌ Potentially reduced tax deductions for investment properties over 10 years old.
❌ Competition can be fierce in high-demand areas, leading to higher purchase prices.
New (never lived in) Home
✅ Eligible for First Home Owner Grant (FHOG) in some states, which could reduce your upfront deposit needed. For more on this grant, check out this blog.
✅ Everything is brand new, meaning lower maintenance and repair costs.
✅ Built with modern features, including better energy efficiency, smart home tech, and contemporary designs. Often coming with a builder’s warranty, offering more peace of mind if you’re using all of your savings for the purchase.
❌ Limited availability—brand-new homes are harder to find and often sell quickly.
❌ Smaller land sizes in new developments compared to established homes.
❌ May be located in newer suburbs, which could mean longer commutes and fewer amenities.
Building a Home
The pros and cons for a new (never lived in) home also ring true for this one. But here’s a few more to consider:
✅ Customise everything—from the layout to the finishes, your home is built and designed just the way you want it…
✅ Potential tax benefits for investors - depreciation deductions can be higher (chat with your accountant!).
✅ Stamp duty savings—you typically only pay stamp duty on the land component, not the total build cost.
❌ Longer wait times – Okay, let’s talk timeline: Find your block (land), wait for the land to register (if it is not ready yet) and settle, find a builder, design your home, commence construction. Potential construction delays due to weather, material shortages, or builder availability.
❌ You may be paying rent and a mortgage simultaneously while waiting for construction to finish. If trades and materials are expensive you’ll also need to weigh up the cost to buy land and build vs the cost of buying an established home that’s ready to move into. Be sure to consider your First Home Buyer Entitlements in this too, or speak to your broker who can do this for you.
❌ More people and processes involved—working with developers, builders, and contractors can be stressful if not managed well.
❌ Additional lending requirements—some banks
Established and new homes usually have traditional home loans, while building often requires construction loans with progress payments. You’ll make Interest Only repayments until your home is being built.
Questions to Ask Yourself
Do I want a home in an established area, or am I open to newer developments?
Am I willing and have the time to take on renovation projects, or do I prefer a home that’s move-in ready?
Do I have the patience and budget to manage a build?
How important is capital growth versus lower upfront costs?
Will I live in the home long-term, or is it an investment?
Final Thoughts
Choosing between an established home, a new home, or building from scratch comes down to what best aligns with your budget, lifestyle, and future goals.
If you want a move-in ready home, an established or brand-new home could be the way to go.
If you’re after customisation and flexibility, building a home may be the best fit.
For investors, factors like rental demand, depreciation benefits, and capital growth potential will play a key role in your decision.
If you're still unsure, let's chat! We’re here to help!
Your Broker,
Tara.
