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Building a Property

Building vs. Buying

Most people would rather move directly into a home that is right for them. Some don’t mind (or even enjoy) renovating and redecorating. But a small percentage of people are attracted to the idea of building their own home. In many ways, Australia is the ideal place to fulfil this dream. There is plenty of land available if you are not especially committed to inner city living, and you can even build in the heart of the city, although this will be more expensive and restricted.

A useful resource for those considering building is a blog called Home I Own.com.

Pros and Cons to Building a Home

Pros:

  • You can design a home to suit you and your family
  • You have greater control over where the house is located
  • You have a brand new home
  • By law, the builder must guarantee the home for 7 years in most States. Builders are also obliged by law to have Builders Warranty Insurance.
  • Under some circumstances, first time owners who are also ‘Owner Builders’ (those building a home in Australia) are entitled to more generous government grants than those buying a house.
  • You only have to pay Stamp Duty on the purchase of the land


Cons:

  • It takes a long time to build a house (usually 1-2 years), and more often than not, builders fail to complete the project in the promised time-frame.
  • You will incur the extra expense of renting while you are building.
  • The overall project may cost more than simply buying a house.
  • Some builders guarantee fixed-priced contracts, but the cost invariably over-runs because of things you have not accounted for in the planning stages.
  • Banks and other lending institutions are less keen to lend money to build than to buy.


A good website on the legal aspects of building provides excellent information.
This site is specifically about the state of Victoria, but much of it applies to other states.

A website for Owner Builders provides information about grants available.
This site is specifically relevant for building in South Australia, but again, much of it applies to the country as a whole.

Beginning the Building Process

Building your own home is a complex and time-consuming business. You must expect to rely on a succession of professionals to help you along the way. Some people opt to appoint a project manager for their build, but this is an extra cost most people cannot afford.

If you have a large budget for your build, it would be wise to employ the services of a qualified architect. At the top-end of the market Australians tend to place great (some may say, excessive) emphasis on whether or not a house is architecturally-designed. Architects often act as project managers and can offer a guide to the total cost of the project measured by price per square metre of the finished house. This price varies enormously according to the size of project, location, the prominence of the architect, and most importantly, the level of finish for the house.

For the average person, the services of an architect are out of reach, so it is best to opt for a fixed-price contract with a reputable building company who have in-house architects and can offer a range of ‘off-the-shelf designs’. These may be reconfigured (at extra cost), but such a scheme is far cheaper and easier to deal with than going it alone with an architect and a succession of tradespeople managed by you or an expensive Project Manager.

Some good advice on starting a building project may be found in the Buyers Guide at Your Home.

The Building Process

  • Find a piece of land that is in the location you wish to live in. This may come with planning permission. The vendor may have designed a house for the site. You can use their plans, modified them or scrap them and start again. If you use the plans and they are still current, you will not need to reapply for planning permission with the local council. If you want to modify the plans (even slightly) you will need to reapply to council. If you wish to start afresh you will need to draw up plans and submit them to the council.
  • Draw up an agreement with an architect or a building company.
  • Go through budgets and plans with them.
  • Settle on an affordable and practical design and modify it to your specific needs
  • A building company will give you a fixed-price contract. This means they cannot go over the agreed budget. They also have to give you a clear time-frame for the build.
  • Pay an initial instalment towards the build. You will have a step-by-step payment schedule for the entire process

The Payment Schedule

This is usually broken down into eight stages.

  1. Deposit payment.
  2. Slab Down. This means when the concrete slab for the house is put into place and dried ready for construction.
  3. Plate High Payment. This is the technical term for when the lower storey of a two- or multi-storey home has been constructed. (If the house is a single-storey property the next step is omitted.)
  4. Suspended Slab Payment. This is when the first floor is completed and the floor or suspended slab for the second storey is put in place
  5. Plate First Payment. This is a payment made when the walls and fittings are in place for the second storey.
  6. Roof cover. As the name implies, this is a payment made after the roof has been constructed and finished.
  7. Lock up payment. This is made when the construction of the house is complete but before many of the appliances, cabinetry, etc., have been installed. It is the point where the basic shell of the building is completed.
  8. Practical Completion Payment. This is made when the house is absolutely finished. The builder will ask you to go on a ‘Walk Through’ of the building. You can point out any faults or anything that has not been delivered as promised. This must then be rectified before you need to make the final payment.

Additional Resources

For more information about the legal aspects of becoming an Owner-Builder, take a look at the Western Australian Building Commission.

Another useful resource for details about the payment schedule and other matters related to building your home see: eHome Builder.com.au.

For information about House and Land Packages go to Relocating/Moving to Australia: Buying A Property.

There are many sites relating to House and Land Packages. It is important to get some professional advice about this before diving in to a scheme. The following sites are useful.

Visit our Life in Australia section for more articles related to the subject Moving to Australia.

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