Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth build their dream home with ease and excitement. I'm Jamie, your host and go to building broker. Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.
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Hello, and welcome back to another episode of the podcast. I am your host, Jamie, as always. And thank you so much for being here. I just wanted to say, wow, I've received quite a few messages over the last few weeks. Just with some people reaching out who have been listening to the podcast and saying how much they've enjoyed it and how valuable it's been.
So I just wanted to say thank you so much for listening and I'm so glad you're finding it enjoyable. If you have the chance, please leave a rating on Spotify or review on Apple. It means so much. Yeah. So thank you so much for tuning in and also taking the time to message. This week, I'm going to chat to you about established and new build.
And it is something that comes up with almost everyone. And it's coming up quite a lot at the moment with, um, having quite a few new clients who are coming to me who have been looking at the established market. For three to six months, but are not getting anywhere, they're getting deflated. And now they're like, what now?
So they have to look at building and yes, the established market is going crazy and it's making it tough. It's not as easy just to walk into a home open and be like, yeah, this is my house. And here's my offering get accepted. There's 20 to 40 people lined up. There's overeast investors who are not even at the home open.
Some houses aren't even going to a home open. They're being bought off the market. Houses are going way above for asking price than what it's actually listed for. And a lot of homes, people are paying more than what it's worth. And you go into a home and you look at it and it's like, okay, cool. It's 550, 000, let's say, but I don't quite love the kitchen, need to change the bathroom, I want to knock this wall out, do something here.
All of a sudden you've racked up an 80, 000 to 100, 000 bill for a renovation and it's like where am I going to get the cash for that for now? And you now have a 550 plus a hundred grand in renovations. So six 50, then it starts looking, well, I don't quite love it. It's not exactly what I want and I'm paying 650, 000.
Should I look at building? I don't know, but a lot of people they're scared about building, which is understandable with the media and the news. And it's a lot to go through. There's not enough education out there. People always go established first, which is fine. Oh, we did it when we built. We tossed up established, new build, established, new build, established, new build.
And same thing, didn't love the homes, had to do renovations for it, was spending more than what it was worth. And then it was like, okay, well, why don't we try and look at building? And that turned out to be such a way better option. I'm so glad now that we built. And most of our clients who do go through that established, new build, established, new build, which everyone does.
When they build, they so thankful and glad that they took the risk and they built and they had the right team and everything behind them. And they actually built their dream home for the same price than the established house. And you don't have to do renovations. You don't have to do all those things, find the cash for that.
You just got to do the bits and pieces around your new house, but it is so much less maintenance and work as well compared to getting an established house and spending your weekends. It's renovating, doing things around the house. So that's what has brought this conversation on. I want to have a chat to you about because there's so many people coming through the doors right now that have wasted three to six or 12 months trying to get into the established market and are not getting anywhere.
Their offers aren't competing. They're not even on the list because there's so many people at the home opens or overseas investors are getting in and snapping up these homes. Without even seeing them and way above asking price 'cause they've got the cash to do it. Now what is the next option? If you need to get out of a rental or you're moving outta your parents, or you wanna buy a house and you can't get into the established market?
The next option is building. Now when we at. The established market at the moment to compare where houses are and how much is being sold and what's on the market. The stock is so low. Your supply that comes back to that supply and demand. The supply is low and the demand is high. Therefore, prices are increasing at the moment.
From the week ending the 13th of August, there is a total of 5, 275 houses, units, and blocks of land on the market. Out of that 5, 000, 2, 360 A homes to buy that is not a lot of homes to buy the supply is so low and when we compare that to last year, so 5, 000 in total units, house and land last year on the market, there was 8, 560.
So there's about 3, 000, let's call it, difference in availability, and last year was tough, and it's still decreasing. And the only way to increase supply is to build new homes. The construction industry can't keep up with the amount of homes it actually needs to build to fix this, to level out the supply and the demand.
Therefore, this supply and demand thing. It's not a quick fix. This isn't going to change in the next six to 12 months, same as the last couple of years, it is not leveling out. And to that as well with talking about how many people are at home opens and how quickly things are going off the market. At the moment, the average time a house is on the market is 10 days to being sold.
That is bucking quick. 10 days for a house to be sold is, is so quick. It doesn't even give you a chance. You've got to be on the ball, over them asking price. You need to be on your A game. And most of the time, it's over east and overseas investors that are snapping up these homes. Which is a shame because it does suck for the local people.
It just shows how hot the Perth market actually is. And when we look at the rental side of it, now the rental side of it at the moment, there's 1, 833 houses and units available on the market to rent, right? Last year, that was 2, 122. So we're 300 ish less than where we were last year. So even the rental market, it's still decreasing.
There is less availability, less supply on the established and the rental market. The average amount of time a rental is going on the market is 16 days. Now that is also quick. That is not a long time. Same as rentals. People are going to rentals and home opens. And there is cars filled in the street.
Endless amount of people looking for rentals. And looking to buy a property. Because you think, alright, building's too hard. There's too much negative stuff on the news. I'm going to buy established, it's way easier. I'm not going to bother building, too hard, too scary. Which 100 percent I understand. It is scary.
But, the amount of time now, home opens, weekends, displays. Going through and looking at the market. Trying to find the perfect established home. The reality is it's probably never going to be perfect because you're going to want to change something. Do this compromise here. You've wasted time, which can affect your borrowing capacity at the moment in the market.
So when interest rates are going up, borrowing capacity is dropping. So if you've been looking for an established house over the last. Six months ago to now your borrowing capacity is going to be very, very different to what was six months ago, which now that's going to affect what you can get in the current market.
Time is money at the moment, which I don't think quite a lot of people understand that time is money. The longer you're waiting. You're borrowing capacity is dropping and prices are increasing so you can afford less of a home, but homes are getting more expensive, established and new build prices are still going up, not as dramatically as they were before, but they are still going up because of that supply and demand.
is not equal. So that comes down to really you could have spent six to 12 months looking at the established market, trying to find a house, going to home opens. You could have been halfway through the building process already. If you get the right information and the right team, you can absolutely build within 12 to 15 months, depending on land titles and finance and a few other bits and pieces.
We won't get into that today, but you can absolutely build when you start looking and you're like, okay, I want to enter the market. What are my options? Established new build. There's pros and cons to both. And you need to work out. What is more important to you? Established, higher upfront costs. Building, lower upfront costs.
Established, offer accepted, move into the house within 30 days. Building, takes 12 to 15 months. Building can work out slightly cheaper than established. Established, you're obviously paying that premium cost because the house is ready there now to move in. Building, slightly cheaper, brand new house because you've got that 12 to 15 month process.
Established, you are paying top dollar to get in, get the house and you're competing with however many other people right now who want that same house and need a house, whatever reason, you know, and that goes the same with, okay, established, you might be looking at 60 grand deposit building. Most of my clients sit between 20 to 30 grand deposit and you can do a savings plan while you start the process.
So if you don't have. a deposit saved yet, that's okay. You can go on a savings plan with building. When you are buying established, you need to have your deposit. They're saved, ready to go, pre approval, offer accepted, finance done, right? When you build, you can work that in with your timeline to make it suit for you.
So if you're like, I'm not ready for established yet, maybe look at starting the building process while you're saving. And it's going to take. Time to save. Yes, but you've already started that process. So you might be better off looking at that option. So what I'm mainly trying to say is when you are looking at getting into the market at the start, do not just keep building to the side because.
It is so tough in the established market. You might try for that and you're like, don't want to build, don't want to build, don't want to build. I'm going established, established, established. That all of a sudden in three to six months when it's not quite working and you're like, Oh my God, what other options do I have?
And you come back to building, you've wasted three to six months. Look at your options both together at the start. Talk to real estate agents, finance brokers. Look at the fees and charges for established and the fees and charges for building. What are your costs? What grants, what's the stamp duty, all that stuff.
And look at it side by side, and then talk to people who are in the building process, who are going in the building process, get independent information. Book an info session. I always have people come in and they're tossing up. I don't know if I want to do. Build or buy and they come in for an info session and they get all the info and they're like, Oh my God.
Wow. Okay. It's not as hard as what I thought it was gonna be and you've just laid out all the information that I was unsure about. Now I can go and make an educated and informed decision on whether building or buying is right. And look, you could toss up between both of them. Go to a few Home Opens, have a look yourself, and then, oh, nah, too hard, okay, this is getting a bit too much, I need to look at building now.
But at least you've got both options and the information for both at the start. I think it's just a lot of people right now. I don't want to build the media, interest rates, builders, bust this, that, the other, all the scary stuff nobody talks about. Banks starting to drop their interest rates behind the scenes like Tanya mentioned in the last episode.
No one talks about. The nine to 12 month builds that are happening right now with the right builder, you know, those good stories. They never make it out as the fear stories. That's what the media feeds off. It's the bad, bad, bad, another builder gone bust here that what about all the builders that are doing the right thing and are making it work?
They're afloat. They're servicing clients. They're building, they're paying trades, happy clients, houses are being handed over. What about that stuff? You know? And it's like, okay, how does that message get out there? And it's hard, but you need to find the right people to get the right information off and have some conversations.
Like, feel free to DM me or book in a call. Hey, I need to work out.
I'm going to look at your finances or your mortgage broker, whoever you're chatting to. What are my options? Established new build, then say, okay, I'm going to look at established. We're going to go to five home opens. If we don't like any of the five. Then I'm going to look at building. Put a time cap on it.
Have a look at it. Don't just put all your eggs in one basket, because what I'm saying is a lot of people who have put all their eggs in one basket, they're coming to me now, three, six, twelve months later saying, look, I've tried the established market, I've given up now. What are my options with building, but they've wasted three to six to 12 months, which is fine.
They had a look. They tried the established market. If you're in the position now of looking at getting into the market, do not waste time by putting all your eggs into one basket. Look at both your options. Get the educated, unbiased, independent information and then work it out from there. It's such a common thing.
Established and new build is always something that I have clients battle through with their head. And we did the same when we built. So it's just about getting that information. And yeah, there's pros and cons to both like established. As a first home buyer, you have no stamp duty up until 430, 000. There is not a lot of homes on the marker for 430, 000.
So even if you buy a 500, 000 home, You're paying stamp duty from 430, 000 to 500, 000. That's still quite a lot on top of your deposit and your savings and your 5%, all that kind of stuff that adds up to higher upfront costs on established. When you build as a first home buyer, you only pay stamp duty on your block of land up until 300, 000.
Now, most people, it might sit just over for their block of land is under 300, 000. So you're already saving so much on your stamp duty compared to established. And that can play a huge part in it. Building, you get the 10, 000 grant towards your. Build and your deposit Establish you don't you only get the concessional rate of stamp duty up until 430 and then it's discounted from there So there's pros and cons to both obviously established you get it straight away Building you've got to wait that 12 to 15 months, but 12 to 15 months in the scheme of let's look at how fast This year is gone.
It's middle of August now and We're coming so close to the end of the year if you start the process You could be in your house by Christmas next year. And that is coming around quick if we look at last Christmas. So weigh it all up, have some conversations, don't put building in the bin and don't put all your eggs in one basket with established because the established market is going off and it is hard as well.
It's a different kind of hard compared to building. Building has its ups and its downs. It's a lot of work and a lot of planning and organization. If you have the right team, the right builder and the right support, you can absolutely do it. Establish is a different ball game. So you just got to work it out.
What's best for you. If you have any questions, yeah, feel free to DM me. Booking a call, come in for an info session. Like let's chat about what are you struggling with your pros and your cons with established a new build, get a different perspective, someone who can give you that unbiased and independent advice.
And then that way you've got everything that you need to, and you can make a decision from there. I hope this episode was helpful for you in weighing up those pros and cons between established and new build and a little bit about the established market at the moment and I will chat with you next week.
Thank you so much for tuning in to the Home Building Like a Boss podcast. I hope you enjoyed today's episode and learned something new. Remember, you've got this and I've got your back. Until next time, stay inspired, stay informed, and stay home. Stay confident on your building journey. I can't wait to chat with you on the next episode.
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