Budgeting for your new home build

It can be tricky trying to work out what a realistic budget should be when you’re a first time builder. And, even if you have built before, each project is different. Setting a budget from the outset - and more importantly, sticking to it – is the best way to start your planning.


Budget for more than you expect

There is no set price for what it will cost to build a new home in Australia. There are a lot of variables such as land size, your desired floorplan, and the level of inclusions both inside and outside the home. The resale price of houses in the surrounding areas should also come into consideration when you are planning a budget for your build if you have capital growth objectives.
Although most people embark on their builds with an idea of their budget, there are several expenses that are easy to overlook when budgeting for your dream home. It’s important to factor all of these into the mix. Some of the costs that we’ve seen impact budgets include:

  • site costs (eg. tree removal, retaining walls, access)
  • driveways
  • landscaping and fencing
  • the slope of your land (generally, the bigger the slope the greater the cost)
  • bushfire compliance and other environmental ratings
  • rental costs (if you’re doing a knockdown rebuild)
  • loan repayments while your home is being built
  • changing your mind (ie. deciding to upgrade or change inclusions along the way)

It can be difficult to accurately estimate these extra costs as everyone’s situation differs so it’s important to consult with experts and factor them into your planning and budget from the get-go.
We recommend keeping a ‘just in case’ buffer fund to help you manage unanticipated costs and variations along your build journey.


Saving benefits when building with a volume home builder

A project or volume builder can potentially save a home buyer thousands of dollars compared to a similar home built by a custom builder. Why?

  1. Due to the volume builder’s scale and level of standardisation they can procure trades and materials with substantial savings.

  2. The upfront costs are significantly less because there are no architectural or drafting costs and there are limited costs associated with managing town planning approvals

  3. Speed to build is generally quicker with a volume builder due to working off stanadardised plans that they know will meet regulations. This means you could be in your home sooner, therefore, saving on paying both rent and mortage repayments simultaneously

  4. Volume builders have display homes you can walk through that evidence what you’ll be buying; this helps you make better decisions about fittings and finishes and reduces the potential for cost blow-outs



Why it’s important to understand your building agreement

Before pressing the GO button be sure to thoroughly read and understand your building agreement. There are some critical things to look for to safeguard yourself throughout the project:

  • Ensure all fittings, choices and inclusions are included in the contract
  • Commencement and completion date should be noted and agreed upon
  • Be sure the appropriate building insurances are in place
  • Progress payments – how much and when – need to be clearly stated
  • The process for any variations to the contract need to be included

Documentation is king, and protects both owner and builder. It helps the project run smoother and assists in the event of a dispute down the track. If you do not understand something in your documentation it is best to seek the advice of a professional advisor to help you navigate it.


Top tips to save for a new home

Building a new home is probably the single largest financial decision you will make. So, it’s important to ensure you’re budgeting correctly for your new home’s completion and have appropriate funds to manage the loan and maintenance of the property once you’ve moved in.
Saving for a new home looks different for everyone depending on their unique financial situation, but these tips may help you move in sooner:

  • Talk to a registered financial planner or banking professional about setting up a realistic savings plan that will work for you and your lifestyle
  • Ask your builder or lender if they have any ‘low deposit’ or ‘savings programs’ in place
  • Consider setting aside funds for growth that you can’t easily access
  • Allocate a percentage of your salary every fortnight/month to automatically go to savings
  • Sell unwanted items around your home to raise some extra cash and declutter at the same time
  • Reduce your monthly spend, even by just one meal out or one new pair of shoes – put the money you would have otherwise spent towards your savings.
  • Reduce or cull ‘pay later’ services which can quickly build up debt if not kept in check
  • Revisit your insurances and utilities plans to see if you can get a better deal – any savings made should be automatically transferred to your home savings account
  • Activate ‘round-up’ banking services on your everyday purchases with round up funds added your savings total

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