Is it cheaper to build or buy in Adelaide?
- Land Costs in Adelaide
- Building Costs in Adelaide
- Where to Build a Home in Adelaide
- Average Land Costs Across Major Australian Cities
- Construction Costs Across Major Australian Cities
- Average Construction and Land Costs Across Major Australian Cities
- Home Buying Costs Across Major Australian Cities
- Pros of Building a New Home in Adelaide
- Cons of Building a Home in Adelaide
- Pros of Buying a Home in Adelaide
- Cons of Buying a Home in Adelaide
According to Finder’s 2023 data, building a home in Adelaide with the help of home builders can be $63,772 cheaper than buying one.
The average cost of building a home with 3 bedrooms is around $611,298 while buying a new one with the same number of bedrooms is approximately $675,070.
However, it’s crucial to remember that this cost comparison is just an estimation and can vary based on factors such as the location, materials, accessibility, and design of the property.
Land Costs in Adelaide
Based on data from the real estate services group Oliver Hume, median land prices in Greater Adelaide have exceeded $200,000 in 2022.
Specifically, the city’s land cost rose 8.5% in June 2022, reaching a median of $205,000 and a median value rate of $465 per square meter.
To get the most value when purchasing land in Adelaide, here’s where you should build your home.
Building Costs in Adelaide
Based on data provided by Property Update, building costs in Adelaide differ, but the general cost per square meter ranges from $1,740 to $3,800.
For a 3-bedroom house, prices fluctuate between $1,300 per square meter for a weatherboard house with budget materials and $1,900 per square meter for a brick veneer single-level home with mid-range finishes.
For a 4-bedroom house, building costs can fall anywhere between $1,900 and $3,900 per square meter. On the other hand, building a 5-bedroom house or a second story could cost upwards of $4,300 per square meter.
Where to Build a Home in Adelaide
Based on factors like schooling options, amenities, lifestyle, and scenery, the Lofty Building Group identifies Northern suburbs like Munno Para West, Angle Vale, and Davoren Park as prime locations for building homes in Adelaide.
They also mentioned areas like Onkaparinga, Charles Sturt, and Mount Barker as terrific spots for building a home and raising a family.
Average Land Costs Across Major Australian Cities
In 2021, Adelaide’s median land cost per square meter was $416, according to the UDIA State of the Land Report – 2022.
Based on the same report and year, Adelaide is cheaper compared to Sydney ($,1501 per square meter), Melbourne ($882 per square meter), Perth ($574 per square meter), and Canberra ($919 per square meter).
Construction Costs Across Major Australian Cities
Finder also reports that In Adelaide, a 3-bedroom brick home’s average construction cost is $2,070 per square meter. This means that a home with 201.8 square meters will have a total construction cost of $417,726.
Compared to other cities and using the same basis, Adelaide’s prices are cheaper. For instance, Sydney’s total construction cost is $451,452.50, Melbourne’s is $484,525.20, and Brisbane’s is $493,095.
Perth’s total construction cost is $508,760, while the ACT has the highest at $557,754.
Average Construction and Land Costs Across Major Australian Cities
Say you’re considering building a 3-bedroom brick home on a lot of around 460 square meters in a major Australian city. Combining average construction and land costs, Adelaide stands out for its affordability, with a total cost of $611,298.
In comparison, Sydney has $1,014,763, Melbourne has $826,718 (or $812,000 for first-home buyers), Brisbane has $773,429 (or $767,204 with first-home vacant land concession), and Perth has $729,572.60 (or $723,635 for first-home owners).
The most expensive is ACT at $1,020,556 (or $1,010,754 with home buyer concession).
Home Buying Costs Across Major Australian Cities
CoreLogic Home Values Index’s 2023 info shows that an established 3-bedroom home in Adelaide costs about $675,070. The median price of this type of home in the city is $645,721, and stamp duty costs $29,349.
Again, this total cost is cheaper compared to other Australian cities.
For reference, Sydney has a total cost of $1,055,131, followed by Melbourne at $787,231, Brisbane at $715,335.50, Perth at $588,068, and Canberra at $854,988.80.
Pros of Building a New Home in Adelaide
Customizability
Building a new home in Adelaide offers the advantage of customizability. You can design your home exactly as you envision it, from the general aesthetics to technical stuff like the floor plan.
Furthermore, building a new home allows you to ensure that the design and layout meet your current and future lifestyle needs.
Energy Efficiency
Building a new home in Adelaide allows you to incorporate energy-efficient features or smart home technology according to your preferences.
This move has several environmental benefits while offering long-term cost savings and enhanced comfort. Some perks you will enjoy are natural heating and sustainable technologies, such as solar panels.
Cheaper Stamp Duty
Stamp duty is a tax paid on property transactions. Those who opt to build a new home in Adelaide will only pay a stamp duty on the land.
On the flip side, homeowners who will buy an established property are required to pay stamp duty on both the house and the land. This means potential savings of at least $15,000 for those who will build.
Peace of Mind Regarding Maintenance
Starting from a blank slate means you do not have to worry much about repairs or replacements.
Brand-new fixtures, fittings, and building materials are more structurally sound, while pre-built homes may be riddled with “old house” issues that will force you to pay more for renovation purposes.
Moreover, newly built homes in Adelaide typically come with warranties on structural components. This feature grants reassurance against unexpected maintenance costs in your homeownership’s early years.
First Home Owners Grants
Adelaide’s homeowners who opted to build a home are eligible for the First Home Owner Grant, potentially providing up to $15,000 in financial assistance
To qualify, you must be building a brand-new home to be your principal place of residence. The home should also have no history of occupancy.
If you want to view the full eligibility criteria of this grant, head to RevenueSA.
Cons of Building a Home in Adelaide
Longer Time to Move
Unlike purchasing an existing home in Adelaide, building a new home typically involves a longer timeline. This extended timeframe may result in stress and uncertainties.
Growing Gardens
Not having pre-built gardens can be a big issue for homeowners who enjoy a green locale.
Naturally, brand-new homes will not have this perk, as the process involves soil preparation, planting, watering, weeding, and more time-consuming labor, which all have to wait until construction is completed.
Poor Construction
Depending on your chosen builder, construction can lead to inconvenience and costly defects.
Workmanship can be compromised by inadequate supervision, lousy planning, or rushed construction schedules, resulting in safety hazards and structural deficiencies.
Takes Too Much Effort
From planning the design and managing your budget to overseeing construction and handling bureaucratic permits, building a home demands extensive time and energy from homeowners.
Construction Loans
Most homeowners apply for a construction loan, a type of financing that provides funds to cover the expenses incurred throughout a building project’s specific construction stages.
Sure, it has perks, like financial flexibility and potential tax benefits, but it also has risks. A few of its risks are having higher interest rates than standard home loans due to the increased risk for lenders in valuing a property that has not been built yet.
Similarly, fees, particularly valuation fees, are often higher as well. This loan also comes with time constraints, as lenders often impose time limits, typically ranging from 6 to 24 months.
Pros of Buying a Home in Adelaide
Convenience
Established homes often come with existing amenities, eliminating the need for additional planning or construction.
Furthermore, compared to building a house from nothing, purchasing an established home allows for a faster move-in process, with settlement periods that can be as short as 30 days.
Freedom of Picking the Location
Purchasing a ready-made home provides immediate access to stellar neighborhoods across Adelaide. This flexibility allows buyers to pick a location close to schools, amenities, and recreational facilities.
Cons of Buying a Home in Adelaide
Limitations on Customization
An existing home will restrict your customization options. While minor alterations or renovations are doable, significant layout or structural modifications may be challenging or costly to implement.
Renovation Fees
As mentioned before, pre-built homes typically suffer from “old house” issues.
Renovating plumbing, wiring, structural, design layout, and fixtures will hit your wallet. Hiring specialized inspectors and contractors will also add to the expenses.
More Expensive Government Fees
More expensive government fees are another drawback associated with pre-built homes. Specifically, stamp duty and registration fees can be higher for older properties due to their typically higher purchase prices.