Building Your Humble Abode

Craig Pope Mortgage Advice 2 High res

Posted 8 months ago by Admin

Building your own home might sound a little far-fetched - but don’t rule it out yet - if you have a good budget set aside, building could be a very real option to consider.

Given the latest Quotable Value (QV) statistics show that the average value of a home in Wellington City is now at $671,387, and in the surrounding areas like the Kapiti Coast is at $458,013, you may find that if you have a $500k upwards budget, then building is a good path to go down. Especially if you’re finding it hard to compete with other buyers.

Before you rush out to grab your construction hat and steel cap boots, you’ll need to consider a few things - one being, you can only build your own house if you are a licensed builder - leave it to the experts to build your dream home we say!

Your starting point

It can be overwhelming, but if you seek expert advice from a quantity surveyor, mortgage adviser, builder and architect, you will be on the right track. As a starting point, you need to think about:

  • Where will I build?

  • What is the cost of a section?

  • What will the total cost to build be, including the land and build cost?

  • What hidden costs are there, such as site preparation?

  • What will I get building compared to buying an existing house?

  • How do the costs compare?

  • How does the finance work?

Local areas to build

A quick scroll through Trade Me Property, highlights that there is land available around places such as, Waikanae, Aotea, Upper Hutt and the Wairarapa. Bear in mind that you will need to be flexible when it comes to the location of your build.

Pros

You get to design your home exactly how you would like it, and there may be less competition at tenders! Also, building is exempt from the LVR restrictions so it can potentially be easier to finance. Builds also may get more in Housing NZ subsidy money, depending on the cost, your eligibility and location.

Cons

It can get a little pricey, so making sure you have a realistic budget and finance secured for this is a must. It can be a complex process and banks differ in criteria, so make sure you have the right adviser helping you. There are rules around what you can, and can’t do, and banks prefer straightforward fixed priced contracts.

So, if building looks like it could be an option for you to explore, get in touch with a mortgage adviser, as they know all of the banks building policies and can help you through the process. Goodluck!

 

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