Melbourne is one of the most beautiful places in Australia and around the world, with its state-of-the-art urban developments and recreational areas. It is rich in historical and modern elements, artistic features, fun festivals, sporting events, and great food.
If you reside in this state, you're surely living an enviable lifestyle. With every wonderful thing within your reach, there would be no reason to leave.
So, if you're looking to move to any city within this state, you have plenty of options. You can find some of the most valuable real estate properties in Truganina, among many other cities, with its close proximity to the Melbourne CBD, schools, town centre, and recreational facilities. Commuting won't be a problem in the area as well, because it has its own train station.
But should you buy or build a house in Melbourne? Which one allows you to save more?
Median Cost of Building a Home
As of 2019, the median lot price in Melbourne is $330,000. If you construct a house on that land, expect to shell out the estimated cost, which is $195,275. If you combine those figures, you'd arrive at $525,275.
Let's say you've already constructed your house. If so, there are finishing costs to spend for, which would likely be an additional 15%-20% of the total price. There's also the stamp duty unless you're a first-time home-buyer who's granted a concession. In Melbourne, stamp duty cost on vacant land (based on its median price) can fall at $14,870.
For first-time home-buyers, the First Home Owner Grants (FHOGs) can offset your finishing costs and stamp duty. In Melbourne, you're eligible for a $10,000 FHOG for building a new home with a value up to $750,000. With these in mind, let's calculate all your potential outlay so far, with stamp duty included:
$525,275 + $131,318.75 (additional 25% finishing costs) + $14,870 = $671,463.75. Subtracting the $10,000 FHOG, your the final costs would be $661,463.75.
Median Price For Buying a Home
The median price for buying an established home in Melbourne is $914,518, a figure that's already over $250,000 higher than buying land and building a home. If you factor in the stamp duty, that'll be $964,464. Your FHOG won't be applied if you buy an established home, so therefore, building a home in Melbourne is $303,00.25 cheaper than buying.
Benefits of Building a Home
You're in control if you build a home. You get to decide its size, layout, and design. The interiors, such as the kitchens, bathrooms, basements, and bedrooms, are all for you to visualize and put to life. The fun part is furnishing. You're free to choose the paint colors, the finishes, the flooring style, cabinetry design, furniture, decor, and light fixtures. Working on those may not be easy, but even so, they're exciting and they allow you to explore your creativity and personal aesthetics.
But while there are benefits, there are also some downsides. Building a home takes many months, and if your old place already got sold before your new home finishes building, then you'd need to find a temporary place to reside in, which means paying for rent.
The finishing costs are inevitable as well, and as mentioned, they can add up to 25% more to the price you already paid. To save as much as you can, negotiate with your builder. Before even starting on the project, ask them essential questions such as how much money do their buyers usually spend on upgrades, what are the inclusions in the base price, and how much would the finishing costs likely be.
Play smart by budgeting for the costs you can pay in cash. You may also want to hire an agent because they're experts in negotiation. Get the help you need and with all the hard work, you'd be living in your Melbourne dream house in no time.