Building Your First Home in Australia - 4 Tips for First Home Buyers

2nd October 2023

Finance & Budgeting Pre-Construction Legal & Contracts First Home Buyer

Building your first home in Australia? Learn how to set a budget, compare house and land packages, spot display home upgrades and prepare to sign.

Building Your First Home in Australia - 4 Tips for First Home Buyers

You’ve found a display home you love, and the advertised house and land package looks like it fits your budget. Then you find out the kitchen finishes are upgrades and the site costs haven’t been confirmed. How do you work out what the home will actually cost?

In this episode of the Home Building Hub podcast, Colin Bischof and Darren Brennan share four practical tips for building your first home. They start with finance, then explain how to research land and builders, separate needs from wants and prepare to sign.

1. Work out what you can comfortably spend

Start with a realistic budget before you commit to a block or fall in love with a floor plan. Ask a mortgage broker to explain your borrowing capacity and how existing debts, car loans and credit card limits may affect it. Then work out what repayments would fit comfortably alongside your regular expenses.

When you put together your budget, consider:

• The land and build together.

  A more expensive block leaves less room for the home, site works and upgrades.

• What you’ll need to pay upfront.

  Ask for the amount and due date of each deposit. The land and build may have separate contracts and payment schedules.

• What you’ll pay while you wait.

  Allow for ongoing rent if you’ll be renting during construction, and consider what a delay would mean for your budget.

• What the quote leaves out.

  Check flooring, driveways and other items you’ll need at handover before you allocate money to upgrades.

The episode discusses grants, stamp duty concessions and other forms of first home buyer assistance. Treat these as topics to investigate. Check current eligibility, price caps and payment timing with the relevant government agency, and ask your broker how any assistance would fit into your finance plan. If you’re considering untitled land, ask how a later settlement could affect your loan approval and whether the builder’s price is held through to your expected start date.

2. Research locations and shortlist two or three builders

Compare a few suburbs or estates online before booking appointments. Look at land prices alongside the commute, transport, shops and other services you’ll use regularly. A lower land price may give you more room in the build budget, so weigh that against what the location would mean for your daily routine.

Once you have a shortlist, visit a display home with the floor plan you’re considering if one is available. Walk through it as if you lived there. Where would you put the dining table? Is there enough storage near the entry? Would the living area work with your furniture?

Ask each shortlisted builder for a written quote and use the same questions to compare them:

• Which parts of the display home differ from the standard floor plan or inclusions?
• Which site costs are fixed, and which are allowances or exclusions?
• Are flooring, appliances and the driveway included in the quoted price?
• Can you choose your own finishes at a colour selection appointment, or will you select from preset colour boards?
• What build timeframe does the builder expect, and what does the warranty cover?

If one quote comes in well below the others, start by comparing the scope line by line. An allowance in one quote and a confirmed price in another can make two packages look more comparable than they are.

3. Price your must-haves before choosing upgrades

Colin and Darren suggest making two lists - what you need and what you’d like. Start with the features that affect how you’ll use the home. You might need three bedrooms and a quiet spot to work, while a thicker stone benchtop or a feature fireplace can go on the wish list.

At the display home, ask the consultant to price the standard floor plan with your must-haves. Then have them price your favourite upgrades separately. That gives you a clearer basis for deciding whether an upgrade is worth the cost. For anything you’re happy to add later, ask the builder whether the design needs to allow for it now.

4. Review the land and build details before signing

When you’ve found a package that suits your budget and needs, check that the paperwork matches what you’ve discussed. Confirm what each deposit secures, when it’s due and what happens if finance or land settlement takes longer than expected.

Colin and Darren recommend getting a conveyancer to review the land contract before signing. Ask whether a finance condition is appropriate for your circumstances and what timeframe your broker needs. They also suggest asking who is responsible if boundary survey pegs are missing at settlement. Clarifying that early can help you understand who would pay if another survey is needed.

Glossary of terms

Frequently asked questions

Should I choose my land or my house design first?

Research them together. Before committing to a block, ask the builder whether your preferred floor plan fits the lot and whether the site or estate requirements would change the design or price.

Does the advertised price include everything in the display home?

Ask the builder for the standard specification and an itemised list of display upgrades. Check the layout as well as the finishes, since the display may include structural changes.

What should I check in a fixed-price house and land package?

Ask the builder to identify exactly what is fixed in writing, including which site works are covered and whether any allowances or exclusions apply. If the land is untitled, also check how long the quoted build price will be held.

Key Takeaways

• Speak with a mortgage broker early and set a budget you can comfortably live with.
• Compare locations online and get written quotes from two or three shortlisted builders.
• Price the standard home with your must-haves before choosing display home upgrades.
• Confirm deposits, site costs and contract terms before you commit.

Watch or listen to the full episode - First Home Buyers: Top Tips for Building Your First Home

About the Home Building Hub Podcast: The Home Building Hub podcast, hosted by industry experts Colin Bischof and Darren Brennan, is Australia’s premier resource for new home buyers. With weekly episodes featuring special guests, the podcast provides objective, high-quality insights into the home building process - completely free and without sales pitches. From understanding financing options to navigating the complexities of building a new home, each episode is packed with actionable advice and tips. Explore more episodes at http://www.homebuildinghub.com.au and join our growing community of informed home buyers.

Disclaimer: This article was generated by AI based on a transcript of our podcast episode and may contain inaccuracies or omissions. Whilst we’re all about providing value to you, this article should not be considered as legal or financial advice. It contains general information only and is based on the content discussed during the podcast episode. This information is relevant to the episode’s release date and may not be applicable at the time of reading. Always seek independent professional advice tailored to your personal situation before making any legal or financial decisions.

TermWhat it meansBorrowing capacityThe amount a lender may be prepared to lend based on its assessment of your circumstances.Standard inclusionsThe materials, fittings and features covered by the builder’s standard specification for the quoted home.Site costsCosts associated with preparing and building on your specific block, such as excavation or foundation work.Untitled landA lot that has yet to receive its own registered title. Ask the land sales team about expected title and settlement dates.Survey pegsMarkers placed by a surveyor to identify points on a property’s boundary.