Buying vs. Building in Queensland: Which Option is Better for First-Home Buyers?

Choosing between buying an existing home or building a new one is a big decision for first-home buyers in Queensland. Each option has its own set of advantages and challenges, influenced by factors such as cost, location, government incentives, and long-term investment potential.

Queensland’s property market continues to be a popular choice for first-home buyers, thanks to government grants, relatively affordable housing compared to Sydney or Melbourne, and the appeal of suburban and regional areas. But is it more practical to buy an established home or build from scratch?

In this guide, Unconditional Finance outlines the advantages and drawbacks to help first-home buyers make an informed decision based on their budget, lifestyle, and long-term goals.

The Case for Buying an Existing Home

Buying an existing home in Queensland comes with key advantages, including:

1. Faster Move-In Time

One of the benefits of buying an existing home is that it’s move-in ready. Once settlement is complete, buyers may be able to move in immediately, avoiding the long wait that comes with building a new home. This is ideal for those who need to move quickly or want to avoid possible delays with construction.

2. More Location Options

Existing homes are often found in well-established suburbs with easy access to transport, schools, shopping centres, and employment hubs. New developments are typically built outside city centres, which may require longer commutes.

3. Potential Cost Savings

Older homes can sometimes be priced lower than newly built properties in the same area. In some cases, buyers may also have more room to negotiate the purchase price, especially if the home has been on the market for a while. Additionally, many existing homes do not have the same upfront costs associated with building, such as site preparation and landscaping.

4. Character and Larger Land Sizes

Many established homes offer unique architectural features, larger block sizes, and more spacious backyards—qualities that can be difficult to find in newly built homes. Queensland’s older homes, such as Queenslanders or post-war cottages, may appeal to buyers looking for character and charm.

5. Renovation Potential

For buyers willing to invest in renovations, an existing home can offer strong potential for capital growth. Renovating may provide homeowners the opportunity to modernise a property while keeping its original charm, potentially at a lower overall cost than building a new home.

The Case for Building a New Home

Building a new home in Queensland provides opportunities such as:

1. Customisation and Modern Features

Building a new home can provide buyers with the opportunity to design a property that suits their specific needs. From layout to finishes, everything can be tailored to personal preferences. This is particularly attractive for buyers who want open-plan living, energy-efficient designs, or smart home technology.

2. Lower Maintenance Costs

New homes usually need less maintenance at first. With brand-new appliances, plumbing, and wiring, costly repairs are less likely. Many builders also provide warranties for added protection.

3. Energy Efficiency and Sustainability

Many modern homes include energy-saving features like better insulation, solar panels, and water-efficient fixtures. These features may contribute to lower electricity and water bills over time, which is useful in Queensland’s warm climate.

4. First Home Owner Grant (FHOG) Eligibility

Queensland’s First Home Owner Grant (FHOG) offers eligible buyers up to $30,000 when purchasing or building a new home valued under $750,000. This may make building a new home an appealing option for first-home buyers looking to reduce upfront costs.

5. Stamp Duty Savings

When building a home, buyers typically only pay stamp duty on the land purchase, not the entire property value. This may result in savings compared to buying an established home, where stamp duty applies to the full purchase price.

Comparing Costs: Buying vs. Building

The financial side of buying vs. building in Queensland includes:

1. Upfront Costs: What You Need to Budget For

Buying an Existing Home

• Deposit: Usually 5–20% of the home’s price, based on what the lender requires.
• Stamp Duty: Applies to the full property price unless eligible for exemptions.
• Legal & Conveyancing Fees: Can range from $1,500 to $3,000.
• Building & Pest Inspection: Recommended before purchase ($500–$800).
• Potential Renovation & Repairs: Immediate costs if upgrades or maintenance are required.

Building a New Home

• Land Purchase Deposit: Usually required upfront before securing a construction loan.
• Construction Loan: Staged payments are made as the build progresses.
• Site Preparation Costs: Excavation, soil testing, and tree removal, which can range from $10,000 to $40,000 depending on land conditions.
• Council Approvals & Permits: These vary by location and development requirements.
• Utility Connections: New builds often require additional costs for water, gas, electricity, and NBN setup.

2. Hidden Costs That Can Catch Buyers Off-Guard

Buying an Existing Home

• Structural Issues & Repairs: Older homes may require costly repairs for plumbing, electrical, or foundations.
• Ongoing Maintenance: Older homes can have higher upkeep costs, especially if appliances and fixtures need replacing.
• Insurance Premiums: Homes in flood-prone areas or with older materials may attract higher insurance costs.

Building a New Home

• Landscaping & Outdoor Features: Fencing, driveways, gardens, and outdoor entertaining areas are often not included in standard build contracts.
• Upgrades & Variations: Builders offer base models, and upgrades (e.g., higher-quality fittings, better kitchen appliances) can increase costs.
• Delays & Rental Costs: Construction delays mean buyers may need to rent for longer, increasing living costs.
• Builder Bankruptcy Risks: If a builder goes under, it could delay construction and create financial challenges.

3. Long-Term Financial Impact: Which Option Holds More Value?

Buying an Existing Home

• Capital Growth Potential: Established suburbs may experience steadier capital growth due to location demand.
• Rental Demand & Resale Value: Homes in desirable areas tend to attract strong rental yields and resale prices.
• Depreciation Benefits: While older homes may not qualify for as many tax depreciation benefits, established locations may still drive strong investment returns.

Building a New Home

• Depreciation Benefits for Investors: New homes may provide higher depreciation deductions for tax purposes, depending on individual circumstances.
• Modern Features Attracting Buyers & Renters: Energy efficiency and contemporary designs can increase rental appeal.
• Growth in Emerging Suburbs: While outer suburbs take time to appreciate in value, infrastructure developments can boost long-term potential.

Which Option Is Better for You?

Choosing between buying and building often depends on individual priorities and financial circumstances. Consider these factors:

• Budget: Can you cover the upfront costs of building, or is buying an existing home a better fit for your finances?
• Location Preference: Do you want to be closer to work, schools, and transport, or are you open to new developments?
• Lifestyle Needs: Are you happy to renovate an older home, or do you prefer a brand-new, low-maintenance property?
• Long-Term Investment: Are you prioritising capital growth potential, rental yield, or future resale value?

Practical Tips for First-Home Buyers

To make the right choice, consider:

1. Research government incentives

Look into the First Home Owner Grant, stamp duty concessions, and low-deposit home loan schemes.

2. Get pre-approved

Knowing your borrowing capacity helps narrow down options.

3. Factor in extra costs

Whether buying or building, unexpected expenses may arise. It is advisable to have a buffer in your budget.

4. Visit display homes and existing properties

This helps compare what you can get for your budget.

5. Seek expert advice

Consulting with a Queensland mortgage broker or financial expert can provide insights into the costs and benefits of buying or building a home.

Wrapping It Up: Buying or Building—What’s Your Best Fit?

Both buying an existing home and building a new one come with potential advantages and challenges. Established homes offer immediate availability, greater location variety, and potential renovation opportunities, while new builds provide modern features, lower maintenance costs, and access to government grants.

Ultimately, the right choice depends on financial circumstances, lifestyle preferences, and long-term goals. First-home buyers may benefit from carefully evaluating their options, taking into account both upfront and long-term costs before making a decision.

Still unsure whether buying or building is right for you? We can help you compare loan options, maximise first-home buyer benefits, and navigate the Queensland housing market. Reach out to us today to explore how we can assist you in making an informed home-buying decision.