Perth PPoR established vs new build

Hi All,
So the general consensus on here is it is better to buy established over buying land and building in terms of cg. I acknowledge the fact that typically you are paying the majority of the asking price for the land when buying established and only a small portion for the house itself but what others factors contribute to the argument established is better than new build?
Also, how likely do people feel that purchasing land & building will give you an end product worth more than your costs? ( If done right and thorough budgets created at the start )
I am not looking at house and land packages in outer Perth suburbs I am looking within 20km of the cbd buying say a rear block that has become available behind an existing premises and building on that. This would entitle me to more in the way of grants such as the fhog of 10k also lower/no stamp duty. If I buy existing for over 530k I will be paying significant stamp duty whereas any land I would purchase would be under the 430k threshold so I will end up with a property worth over 530k that I paid zero stamp duty on ( please correct me if I am wrong on the stamp duty rules )
Id love to her peoples opinions/suggestions/pros-cons arguments
I am not leaning specifically towards either strategy at the moment and am staying open minded

 

Hi @Cmelderis, since its your PPoR, the house should be whatever that suits you the best. If you like new house then go for it if you don't mind abit further from the CBD. The typical trade off factors are closer vs bigger vs newer if you have a set budget to begin with. For example, with existing stocks you can easily buy something with in the 10 km radius for your budget with good transportation options and amenities whereas for new build you might need to go 20km out with land for 300k and build at 230k. For me I would go for close to work and amendities.

 

There are blocks in the established areas we are looking to buy ( hilton, scarborough, palmyra ) therefore whether we buy new or established it will be the same area i.e. we wont be sacrificing distance etc
The question was more regarding the pros/cons between building on blocks in these areas and buying established.
Cheers

 

I don't know that market there but it really depends on the area. For example if you had a vacant block of land close to Sydney, Melbourne or Brisbane cbd and slapped a new house next to period homes you wouldn't do well out of it. Initially it would hold it's value but then depreciate faster as it goes out of date compared to what is around it. If we're talking purely from a financial perspective it would be better to buy established in those parts.

Go a bit further out and provided you don't over capitalise then I would be going new every day of the week. By the time a house is 10 years old you're in maintenance territory and a lot of expenses start to creep up.

 

Great point Biz. Anything we build would be in keeping with the look and feel of the area

 

Even then it won't hold value like what is around it. They call them reproduction terraces or reproduction queenslanders. They never seem to go for as much as the original ones. Again, I have NFI about the Perth market so do your own DD.

 

Something to look at is the sale price of new builds in the area vs established homes.

 

This is an important consideration but maybe not relevant to the OP's target areas. For example, this is a typical Hilton shack. These are being knocked down and new homes built. The new homes hold their value better than these shacks, which are not valued.

28 Noel Street Hilton WA 6163 - House for Sale #127532498 - realestate.com.au

 

Thanks Perthguy, not many new builds in those areas to look at sale prices on apart from maybe doubleview has some new villas etc

 

That's a typical 50's/60's asbestos bomb. Those you can knock down anywhere no problem. I'm talking more 100-200 year old terraces, bungalows and queenslanders.

 

Is it just me or is that stupidly highly priced?

 

Haha probably just you. I don't want to give away too much, but I'm offering on it as we speak.

@Perthguy you're giving away my finds!

 

I thought the land threshold was $300k for no stamp duty. I haven't looked in a while so could be wrong.

As for your original question, I think its unlikely but possible you could find an infill block to build on and end up with something worth at least what you spent on it, or a little more. Its something you might really need to specialise your design and build for though, and might not suit you for a PPOR.

I'd say its nearly impossible in a greenfields estate however.

 

The block is 663sqm
R-Code is R30, so potential 2 unit site? I don't know if that is a good price for the area.

Next door has been divided which might give some some clues about end values hopefully.

 

Completely unintentional. I just wanted to demonstrate to @Biz that existing housing stock is sometimes low value. I should have picked a "sold" property.

 

I mean if you're in the game and can build at a good price then yes of course there's money to be made but I thought you would be able to get a larger block for that kind of money. In saying that I don't know what your'e bidding.....it could be well below the asking......

 

Haha all good. I often find great minds think alike and PC members often end up eyeing off the same properties inadvertently. I'm sure lots of members have probably bid against each other without knowing in the past.

Yeah lets just say I'm not offering the asking price... I better not say more at the moment but happy to share my plans after I secure it or lose out to someone else!

 

Thanks thatbum. Land would be under 300k anyway so thats fine if the limit is 300k
Thank you for your advice on greenfield sites and unlikely to end up even after land + build cost

 

Good, I love a good haggle, fingers crossed you get it for what you want