To Buy a Pre-Built Home or to Build – Pros and Cons

To Buy a Pre-Built Home or to Build - Pros and ConsWhen considering home ownership in Australia, many buyers simply assume what will be considered will be pre-built homes. However, the option of building a home also exists, especially in the outer areas where there is more land available to consider construction as a viable option.

Land for sale Wellard is one example. That said, just choosing to build versus buy pre-built is a bit more complicated than just choosing one over the other. A prospective homeowner needs to perform quite a bit of research to fully understand the differences involved the benefits and the respective challenges.


One of the first things that will come up is the issue of cost. While building at first may seem cheaper, a buyer has to understand all the expenses involved, not just the pure construction cost. Often, these costs are spread out and cash flow needs to be available to cover them as the charges hit. Many times a buyer has to first pull out a construction loan to affect the build. Then, when the construction is entirely complete, a second loan needs to be taken to pay off the construction loan and actually finance the property for an extend period, similar to a normal home purchase financing if it was pre-built.

The down payment required can be more than that for a pre-built home, as much as 6 percent or more. However, there are tax advantages to building a home as well, which can offset overall costs. And the down payment or costs can be offset with up to $8,000 from the South Australian Government First Home Bonus Grant, which can be used for built homes as well as purchased.

Buying a pre-built home, in comparison, includes all the costs in one package. So the total price paid covers the build, permits, the builder’s profit, taxes, and the property value. Because the property is complete when a loan is applied for, the finished property becomes the collateral for a home loan, securing it should payment not follow through. Less money may be required for a down payment as well. Homebuyers can get financing with as little as 3 percent put on the table. Finally, new homebuyers can apply for government help with grants ($8,000 from the South Australian Government First Home Bonus Grant and $7,000 from the First Home Owner Grant).

While guesses and estimates can be made, it’s critical to work with a building expert to fully understand the build process versus purchasing pre-built to get a full picture of the related comparison, whether it’s land for sale in Wellard or other locations.


Where a home will be built or bought has a huge impact on its long-term value as well as the ability to enjoy the property as an owner. Those locations that are closer to urban centres are going to be more expensive because various resources are already in place.

Vice versa, locations out in the country will be cheaper for property but more infrastructure has to be built to maintain the home (otherwise everything from water to electricity has to be brought in).

On the other hand, locations even within the same category can be good or bad. There are plenty of urban locations that are cheap because the area is depressed or has social issues such as crime. There also plenty of rural locations that are a bad idea due to being flood-prone or being a high risk of pest infestation. So any location needs to be inspected.

For the most part, pre-built areas will often be cleared out as a region because a developer will build anywhere from 20 to 100 homes at a time. That means the general grounds will be cleared of issues and the infrastructure will be installed, such as sewer, electricity and water. A construction location entirely depends on the buyer to take care of the area. Not checking the property out thoroughly can result in serious surprises such as unstable ground, sinkholes, and other hazards. There are still good locations as well, such as land for sale in Wellard.

In Summary

There are other differences a buyer needs to pay attention to, including the timing of how long and when to build versus the convenience of buying a home when it’s ready. On the other hand, building clearly allows a far better advantage towards customizing a home to specific desires. There’s no set standard for what should work in every situations because people’s needs are different. This is why research and getting expert advice is so important in making a buy vs. build decision.

As a result, prospective homeowners should take the time to do their homework between the two home choices. There’s lots of information to consider, and good research will make the difference in a decision that creates a viable home or a long-term financial mistake.

Cedar Woods Properties has created award winning residential communities for 25 years and is a highly reputable property developer. Established in 1987 and listed on the Australian Securities Exchange since 1994, the company has helped thousands call a Cedar Woods estate home.

Our project in Wellard is named Emerald Park. Visit us at to find out more about our land packages.

Editorial Team
ModernLifeBlogs, It is a evolving space where Social Media, Technology, Health and inspiration co-exist under one roof. Find the newest info about Social Networking, the latest products in Technology, the most innovative topics about Life! Get Connect with us Write for Us | Advertise

Leave a Comment