Street Roads Of Ormeau Ridge Estate

Should I Buy or Build a House?

When it comes to buying a house – whether for a primary residence or investment property – one of the most urgent questions that people have is, “Build or buy?”

Regardless of what some might tell you, there’s no black and white answer to this question. There are advantages and disadvantages on both sides of the equation, and how much each will affect you depends on your individual circumstances. When you get right down to it, the important question is actually, “How do I decide whether to build or buy?”

Let’s look at some of the advantages and disadvantages of each option:




Existing property

You can see exactly what you’re getting for your money – the building is physically there and you can walk around in it, touch it, etc.


The transaction is much faster – generally within 60 days you own it and can start to live in it, decorate, move in tenants, or whatever you want to do with the house.

Stamp duty is much higher than for a comparable house that you build. For example, a $500,000 house will cost around $18,000 in stamp duty, vs building, which would usually cost around $7,000.


Maintenance costs are higher straight up as parts of the house start to wear out. Unforeseen large repair bills are more likely.

House and land package

Stamp duty is significantly lower, as you’re only paying it on the land.

 Maintenance costs are lower and more predictable – primarily appliance and minor upkeep.

 Depreciation on the property (for tax purposes) is highest when the property is new. 

 More freedom to tailor the house to meet current investment market trends – for example, bedroom size, number of bathrooms, and kitchen configuration.

Holding costs are generated while you wait for the house to be built – land and construction loan interest – with no rent coming in to balance them out.


Unforeseen building delays can throw out your investment schedule.


Longer process to be managed.

Am I best suited to buying an existing house?

Generally speaking, the investors who will be better suited with an existing house are those with multiple investment properties in their portfolios and have larger cash resources to cope with any large unexpected repair costs, and whose investment strategy favours fast transactions.

Am I best suited to building?

Investors who are best suited to buying land and building a house tend to be those who are fairly new to investment properties and are unfamiliar with property maintenance and repair, or who want to stretch their funds as far as possible – minimizing stamp duty can be a real boon in these circumstances.

What should I do about it?

Keep in mind that the advice in this blog post is very generalized, and it might not suit your particular circumstances. Talk to a property investment professional to get specialized advice for your situation.