Is it cheaper to build than buy? Surprisingly, building is the more affordable option for these first-home buyers

Laura and Shaun Fraser had never considered building as an option to get onto the property ladder in their home city of Brisbane.

They spent 18 months looking at established homes in the Redlands area, trying to find something for less than $750,000 – so they could qualify for the first-home buyer grant.

“Nothing was jumping out at us,” Laura said. “Anything in our price range would have required substantial renovations or wouldn’t have been big enough for our growing family.”

At first thought, building a house seemed daunting, overwhelming and too expensive.

But a recent land lot discount, combined with a flexible builder happy to work to a strict budget, means the first-home buyer couple will pay less than $750,000 for a brand new four-bedroom home in Victoria Point in the Redlands district.

It’s well under the suburb’s median house price of $825,000, according to Domain data.

Laura, a disputes lawyer, had always planned to live in Redlands – about 40 minutes from Brisbane CBD – which was, until recently, a reasonably affordable area.

“I’m Redlands born and raised, and although I’d lived elsewhere, I always knew I would raise a family in Redlands. My parents are there and grandparent help is worth its weight in gold.”

But prices increased exponentially during the pandemic and have continued to tick up, with the median house price in Victoria Point shooting up 58.6 per cent in five years.

Struggling to find a home within their budget, the Frasers instead found a bayside block of land in the Arc on the Point estate, developed by Urbex, for $430,000 – discounted from $560,000.

They met with a builder’s broker and made their own enquiries with local building companies. In order to secure the first-home buyer grant, the build had a strict budget of $320,000, which proved a difficult ask in the current construction climate.

“Some builders said flat out, they couldn’t do it,” she said. “In the end, it came down to floor plans.”

The couple chose Hallmark Homes because they offered flexibility. The couple removed landscaping, blinds and ducted air-conditioning from their overall package, opting to pay for those after the home is complete.

“There’s little things like that that have brought our contract price down,” Laura said.

To avoid paying a mortgage and rent, the family of three will live with Laura’s parents while the build is underway.

Once complete, the single-storey home will have four bedrooms, two bathrooms and a study.

SOLD - $960,000

34 Seagull Street, Victoria Point QLD 4165

4

2

4

View property

Local real estate agent Michelle Cattran of Harcourts said young families seeking four-bedroom homes in the area would struggle to find something for less than $900,000.

Asked what $750,000 could buy, she quipped, “it got you a lot more a few years ago”.

“It will get you a three-bedroom, low-set home. It would be hard to find a four-bedroom, two-bathroom home for $750,000.”

She said first-home buyers had a lot of competition at the lower end of the market from people looking to downsize to reduce mortgage payments.

“A lot of people are selling their $1 million to $1.2 million house and looking around that $850,000 mark.”

“We don’t get too many first-home buyers in this area now.”

SOLD - $850,000

26 Prescoter Drive, Victoria Point QLD 4165

3

1

1

View property

The Arc on the Point estate is well into its second stage release of land lots ranging from 355 square metres to 639 square metres, with prices starting at $400,000.

Urbex are offering a stock sale on titled land until June 28, saving buyers an average of $100,000 per lot.

“Since the sale launch, we’ve seen a notable increase in land enquiries, with both individuals and couples considering building or investing in Victoria Point,” said Phil Johnston, sales manager at Urbex.

Although it’s likely to take at least nine months before their new home is finished, Laura is confident they have made the right financial decision.

“We’re just at the beginning but we’re very happy with the decision we’ve made,” she said. 

“It seems like the better option overall because we were able to enter the market within our budget and we get a brand-new home that we can design ourselves.”