The real estate market is booming at the moment and that has seen an increase in the number of first home buyers that are choosing new builds.
Of course a lot of Kiwis do dream of a brand new home, but often first home buyers are told to start with a run down place.
Yes, it makes sense to ensure that you are buying a home that fits within your budget.
But does that need to exclude a new build?
New Builds Are Not Always Expensive
There is a perception that a new home will cost more.
It is easy to blow the budget when building a new home, but many of the building companies are building lower cost homes designed specifically for first home buyers.
These lower cost homes still come with many of the benefits of the more expensive new homes.
The cost of a new home can be split up to the cost of the land and the cost of the build.
The Land – the cost of the land can make up a significant part of the overall cost and especially in larger cities when land is in short supply. What we are seeing in many of the new suburbs are a number of smaller sections designed to help keep the total cost lower, and while some people want larger sections this is something that you may need to accept when you need to keep within a budget.
The Build – there are many ways that building companies can keep costs down and it doesn’t mean that the quality is poor. When you are building your dream home you may want to use top quality and rather expensive materials, but you can also select materials that sit within a budget. You can use standard joinery, pine decking, reasonably affordable appliances and floor coverings etc. Yes, you may want a top of the line Miele oven which costs over $10,000 but you can also get some good ovens for about $1,000.
If you are considering buying your first home then you should go and have a look and see what you can get within a budget.
You may be surprised.
Other Reasons That First Home Buyers Choose New Builds
As a first home buyer you probably already know that buying a house is a major purchase.
Apart from just wanting a new home, there are some other reasons that first home buyers are looking at new builds.
Let’s consider these three other reasons new builds can be a good option;
Set Prices – when the property market is booming it’s hard for first home buyers as so many properties are sold at auction or snapped up quickly.
Incentives To Go New – the Governments of the past few years have understood the lack of new homes being build has caused significant price increases. In an effort to get more homes built they have incentivised first home buyers by doubling the First Home Grant that is available. This means a couple could get up to $20,000 if they are buying a new home.
More Time – many new builds are sold off the plans and so your new home may be a few months before it is ready. While you may want to move straight in, the extra time can be a real bonus as it means you can buy at today’s prices but have time to save a bigger deposit and hopefully watch the value increase too.
There are some things that you need to be aware of too.
New Homes Need Finishing Touches
When you build a new build you may end up with a nice but bland house.
Most building companies do use bland colour pallets, do not install window dressings and do the bare minimum of landscaping.
We painted out a wall and installed a large mirror to make a statement, and mirrors are a great way to increase the perceived size of a room too.
Why add mirrors? READ MORE HERE
In many ways this allows you to put your mark on your new home, but there are additional costs to finishing these things the way that you might like them.
Again, you can be quite frugal with these.
Consider Your Mortgage Structure Too
While it’s easy to look at the low home loan interest rates, you should consider your mortgage structure carefully.
As mortgage brokers we often see people that are excited to be buying their first home and forget to spend the time learning and deciding on a suitable loan structure.
While it may not seem important at the time, it actually can make a huge difference over time.
You should take some time to get this right as it can save you thousands of dollars and help you get debt free faster.
A good loan structure can also give you options and financial protection in the future.
Even if you have already arranged your mortgage with the bank, a good mortgage broker will offer free advice on how to structure your mortgage that suits you.
It’s one of the benefits of using a mortgage broker.