More owners and developers are planning to construct new homes and renovate existing properties, according to the latest home building approvals data.
In January 2023, only 12,185 building approvals were issued. But after trending higher throughout the year, the number of approvals reached 14,529 in November, an increase of 19.2%.
Please contact me before you start a building or renovation project, so I can explain how the finance works.
Unlike with a regular home loan, where you receive the money in a lump sum, a construction loan involves a series of progress payments (typically five) as your project proceeds. The advantage of this approach is that instead of paying interest on the whole loan amount, you pay interest only on the portion received.
Another difference is that construction loans typically start as interest-only; you can then switch to paying principal and interest once the project is complete.
