Is Building a House Cheaper Than Buying?

You’ve decided on your dream suburb, but now to buy (or build) your dream home.

When looking to buy an existing home or land to build on, it’s important to not only consider the ‘cheapest’ option, but the option that suits your needs, priorities and abilities.

While both options offer their own significant financial and social benefits, ultimately, the ‘better’ option will depend on the priorities of you – the buyer.

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The question of whether to buy or build is certainly a tough one, and as mentioned will ultimately come down to some very individual preferences.

However, if considered purely in monetary terms, the choice to build or buy comes down to a few key factors, including;

  • Median house prices in your preferred suburb
  • Stamp duty
  • The First Home Owner’s Grant


If median house prices within your chosen suburb are a little over your budget, then perhaps you may benefit from looking for a block of land to build on instead.

It is important to keep in mind that even if you are able to afford to buy an existing house in your preferred suburb, that you may be looking to outlay extra renovation costs down the track, if the house isn’t exactly what you would have chosen if you had built.


Stamp Duty is a tax on a property transaction that is charged by each state and territory, and the amounts can and do vary.

Your Stamp Duty rate will depend on factors such as the value of the property, if it is your primary residence and your residency status.

If you are a first time home buyer, you could be eligible for a concession on your Stamp Duty – depending on the state or territory you live in.

TIP: When you build a home from scratch, you do not pay Stamp Duty on the house – only on the land. This is also true if you move into a newly-built home that has never been lived in before.

Important to note if you are looking to build;

No duty is payable by eligible purchasers buying a vacant block of residential land valued at up to $350,000, while concessions are available for vacant land purchased for between $350,000 and $450,000.

It’s also important to note that your Stamp Duty could be offset by First Home Owner Grants available for the construction of new homes.

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It’s important to note that in many states the First Home Owner’s Grant does not apply for the purchase of an established home.

Here in NSW, the First Home Owners Grant NSW 2019, called the ‘First Home Owner Grant (New Homes) Scheme’ was developed to assist eligible first home owners to purchase or build a new home by offering a $10,000 grant.

The NSW Government’s comprehensive package to improve housing affordability is focused on helping first home buyers, who often face stiff competition from investors.

For first home buyers, this package will abolish Stamp Duty on all homes up to $650,000, and give Stamp Duty relief for homes up to $800,000.

It will also provide a $10,000 grant for builders of brand new home up to $750,000, and purchasers of brand new homes up to $600,000.

So, if this is your first home, it may be a huge missed cost saving opportunity to purchase an existing home, and not take advantage of the First Home Owner’s Grant by building or buying a brand new one!

Read more about your First Home Owner’s Grant eligibility here.

However, as mentioned previously the build vs buying decision will still come down to much more than cost, and will ultimately come down to the kind of home and home buying experience that you are looking for.

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Cost is one thing, but there are many more issues to consider when deciding between building or buying a home. 

Let’s take a look at the pros and cons of each scenario, which should help you to determine which option will best suit your needs, your lifestyle and your financial position!


Buying land and building your new home from scratch offers several unique benefits that are not offered when purchasing an established property.

Many first home buyers are drawn to building as an option, due to the savings and concessions available – such as reduced Stamp Duty and the First Home Owner’s Grant.

But, what other pros are there to building your own home?


Brand new homes are more likely to be built to higher energy efficiency standards than existing (older) homes, and also hold much fewer costly maintenance issues.

Building your home from scratch also gives you the opportunity to take advantage of aspects such as sun, shade, air-flow, insulation and energy-efficient glazing options.

So when building a brand new home, you will generally have lower ongoing costs in terms of energy and maintenance, meaning you won’t have to put any money towards it over the first few years.

Also with a brand new home, even if issues do arise within the first few years, they will generally be covered under warranty.

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Image: Colorbond


One of the major benefits of building a brand new home is creative control!

When building a brand new home, you have the ability to customise it according to your preferences and individual style. You also get to choose the finer aesthetic details such as your materials, fittings and fixtures.

You get to decide on things like your facade style, and your floorplan – rather than taking on the costs involved in renovating to create the floorplan/look that you are after within an existing property.

Talk to our friendly team here at Mincove homes today about our vast range of floorplans, or about customising your brand new project home.


Whilst building may be the more time-consuming process, as a buyer – it can save you multiple weekends of time spent at house inspections, auctions and being in negotiation with agents.

Generally, there is much less competition when in the market to buy a block of land (rather than an existing house) as many people are turned off by the stress, cost and time involved in building.

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So in conclusion, there are some pretty attractive reasons to build;

  • Incentives such as reduced Stamp Duty and the First Home Owner’s Grant
  • Lower ongoing costs in terms of energy efficiency and maintenance
  • Complete customisation to suit your personal style
  • Having less competition in the market to buy land



Before you start your new build, it’s likely that you will be up for some additional costs associated with planning, council approvals and preparing the site for building on.

Here at Mincove Homes, we take care of the planning, preparation and approval stages of your build for you, and include these costs in your fixed price quote, so that you don’t have to worry about them at all!

Also when building your own home, there are a few extras that you may be up for cost-wise once you’ve finished the build.

These extra finishing costs that you don’t face when buying an existing home include things like fences, your driveway and your landscaping.

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One of the main drawbacks of building a new home is that they require months to build, which can take considerably longer than moving into an already-constructed home.

You also need to be aware of the possibility of unforeseen delays to the build process such as time to gain Council approval, variations to the build, and delays due to weather conditions.

Here at Mincove Homes, we work closely with our experienced team of local trades and suppliers to provide our clients with fixed price tenders and build-time guarantees.


Unlike buying an existing home, you can’t move in straight away if you decide to build from scratch!

So, if you do decide to build, you will need to think about your living arrangements for the duration of the build.

TIP: It is generally a good idea to stay in your temporary living option for a long as possible whilst your new build is underway, to avoid you and your family from living amongst constant disruption, noise and general chaos!

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Generally when applying for a loan to purchase an existing home, the paperwork required is mainly just income payslips and your latest bank statements.

When applying for construction loans, you will also be required to provide more detailed construction-related items such as plans, permits, contracts and insurance.

Your lender would also need to know about any changes to these building plans, costs or contracts throughout the build process.

TIP: Try to find a builder who will help you with this initial part of the process. Here at Mincove Homes, we help our clients to gather all of the required build-related documentation to assist with the smoothest preparation process possible.

So in conclusion, here are a few of the main ‘negatives’ associated with building;

  • Additional pre and post build costs
  • A longer time frame between buying and moving in
  • Generally more paperwork



An established house may have the added benefit of being located closer to the city centre, transport, schools, employment opportunities and other amenities.

This is generally a given as empty parcels of land are not particularly easy to come by in neighbourhoods that have been established for some time.

TIP: To find land close to amenities and the town centre, research brand new housing estates (such as Calderwood Valley) within your area where new amenities are being or have been built within close vicinity to the new blocks of land for sale.


Here at Mincove Homes, we take the hassle out of finding the right parcel of land, AND your new build, with our limited number of house and land packages.

View our range of beautiful and affordable house and land packages.


Established homes often come on larger parcels of land than what is offered by developers for new builds.

In general land sizes used to be larger than they are these days, with established homes often being a good size themselves and coming with a nice-sized yard too.

To help you address this issue, here at Mincove Homes we offer an extensive range of floorplan and home design options suited to smaller and even split-level parcels of land.

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View our vast range of single storeydouble storey and split-level home designs!

TIP: Found the perfect parcel of land to knock down and rebuild on? Mincove Homes can help you with that too!


Another factor to consider is the benefit of established gardens, landscaping and trees that will come with established homes – but will pose as an additional cost for you when building from scratch.


It’s no secret that buying an established home is generally a quicker process than building a new house.

Once you have gained your pre-approval, done your research and house-hunting and paid your deposit, you could be able to move into your new home in as little as 30 days.

Meanwhile, building a house can take many months – about 7.5 months on average, according to the Australian Housing and Urban Research Institute (AHURI).

So in conclusion, the main benefits associated with buying an established house are;

  • Securing a home closer to the CBD and other amenities
  • Securing a slightly larger parcel of land
  • Already established landscaping around your new home
  • You can move in quicker



One of the biggest disadvantages of buying an established home is that you may not be able to modify or renovate it in the way that you wish to, and it’s not often easy to find an existing home that ticks all of your boxes.

If you are able to renovate an existing home that you’ve purchased, you may find that this becomes quite a costly process.

There is also the possibility when renovating, of running into unforeseen additional costs such as termite damage, structural requirements and/or asbestos removal.

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Often with existing homes there can lie potential hidden long-term maintenance or repairs costs!

When looking at an existing house to purchase, it is important that you do a thorough inspection of things like plumbing, electrical/wiring and fixtures before you make the purchase.


Depending on which state you live in, recent data from CoreLogic RP DataDomain Group, and BMT Quantity Surveyors shows that it may be cheaper to build a new house from scratch, than to buy an existing home:

  • Sydney: Cheaper to build
  • Melbourne: Cheaper to build
  • Brisbane: Cheaper to buy an existing home
  • Adelaide: Cheaper to build
  • Perth: Cheaper to buy an existing home
  • Hobart: Cheaper to buy an existing home


As mentioned throughout this article, this will depend on a few important factors including your individual needs, the area that you are buying in and your position as a buyer.

Whilst building a brand new home can take some time, and you’ll have to budget for more than the cost of the land and the build – it can still end up being cheaper than buying an existing house.

Is Building a House Cheaper Than Buying? | Mincove Homes, Is Building a House Cheaper Than Buying?

To have a chat with one of our friendly and experienced New Homes Consultants about building your brand new home, give us a call today on (02) 4256 0222.

Mincove Homes
Mincove Homes Published on Sep 13, 2019 12 minute read

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