What to consider before you build your home

Building a home takes time, money and effort, but the end result is worth it. There’s a lot to work out before those first bricks are laid, and having a firm plan of attack will set you up for success. From budgeting your costs to picking the right builder, here’s what to consider before building your home.

5 minute read

Why build?

Call the shots

Whether you want to make your own changes to existing plans or design from scratch, it's your call. Take the opportunity to choose what suits – from the style of bricks, tiles, carpets, taps and door handles to the position of the power points and lights.

Save on stamp duty

When you buy an established house, you pay stamp duty on the purchase price, whereas when you build, you typically only need to pay stamp duty on the land price. This could save you a significant amount in upfront costs.

A good way to invest

Building and then renting out a new home can be an effective way to invest. You can take advantage of better capital depreciation with a new home, as you can claim deductions over the maximum life of the property.

If you buy the right sized block and it's eligible for subdivision, you could build more than one home and start to develop your property portfolio. You could save time and potentially money by building more than one home at once, or by building in a certain position on your block to allow for future development. Each council will have their own rules and regulations about subdivision, so make sure you do the research.

Less maintenance

When everything is new, it means less repairs and maintenance around your home.

Keep in mind…

Like with any home purchase, there are risks involved in building, such as:

  • The quality of the building not being to your standard
  • Construction not being completed on time
  • Unexpected costs
  • Budget restrictions

Careful planning is crucial to help minimise the risks. It’s important to consider all your options, do your research and even seek out professional advice (like speaking to your lender and potential builder) before making a decision.

What to consider before you build

1. Location

Where you build is your call – you could choose a block in an established suburb or a newly developed area, or even opt for a combined house and land package offered by developers.

2. Type of home

Think future focussed when it comes to the number and types of rooms you want to build. Consider their features and what you’ll use them for down the track.

3. Cost versus budget

Remember, it’s not just the home itself that you’ll need to factor into your budget. You might have to pay demolition and council fees or rent for somewhere to live while you build.

Your builder will give you an idea of what it will cost to finish your home, but make sure you allow some money in your budget for unexpected costs as well as things like landscaping, appliances, window fittings and furniture. There's also home insurance to consider.

To save money, you might like to do some of the work yourself, like painting or putting down floor coverings.

4. Rules and regulations

Some local councils and government authorities have certain regulations that may impact your home design and landscaping choices. Abiding by council rules could save you money and hassle later.

5. Picking the right builder

Your choice of builder has a huge impact on your overall building experience, so it’s important to do your research. Visit a range of display homes and chat to a few different builders to ensure you’re getting value for money. Consider each builder’s quality of work, service and reputation, and make sure they’re licensed and accredited. To help you decide, it’s a good idea to talk to the Master Builders’ Association.

6. The fine print

Before you sign your building contract, always read the fine print. If you’re not sure about something, ask your builder to clarify, or seek independent professional advice on what it means before you sign. You may be charged if you need to make changes during your build, so it’s best to be certain before you sign.

Monitoring the build

Building your home is a major investment, so once the construction process has begun, keep a close eye on it. At Bankwest, we’ll do the same, making sure that the building work is completed to match what you’re paying for. We do this through a construction loan. With this type of loan, funds are released in stages as the building work progresses, following periodic valuations.

Construction loans

When you take out a construction loan to help you fund the build, the money is released in stages as the building work progresses. This helps to make sure you're only paying for work that's been completed. What's more, you only need to pay the interest on your loan until your home's built. Making lower repayments during the construction period could mean you have some extra cash up your sleeve for things like expenses you didn't see coming or rent to stay somewhere while you're building. Find out more about construction loans.

About this article

We take care of all the BS (bank stuff) so you can access the knowledge you need to make informed decisions. When we write a guide or article, we take steps to make sure the information is relevant, accurate and most of all, helpful.

Home loans that help you build a home

Construction loans are designed to help monitor the build – and you only need to pay the interest on your loan until construction is done. A construction loan can also be used to finance renovations.

Keep reading

Find out what happens when you get a construction loan, from slab down to hand over.

Avoid budget surprises and prepare your savings by checking out our guide on what you can expect to pay for when buying a home.

Need more help?

Talk to a Home Lending Specialist – when and where it suits you.

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.