Are you thinking about building a house to protect yourself from the increase in property prices? If so, you may want to reconsider. Like property prices, the costs of building a home in NSW are soaring. Multiple reports have noted that Australia is currently experiencing the fastest annual growth in construction costs since 2001.
The idea of building a home can be very appealing, but you shouldn’t write off buying a house in NSW just yet. Before making a decision, it’s important to understand why building costs are so high and why taking the building route could be more unpredictable and costly.
Why Are Building Costs So High?
There are several reasons why building costs have gotten so high. A major contributing factor is that the demand for construction materials has remained high while supply challenges continue. There is currently a shortage of key building materials, including structural timber and metal products like steel.
These shortages are partly attributed to these materials rising in cost. This is especially true for imported materials that may come with higher shipping costs. A rise in fuel costs and labour shortages are other contributing factors to the high costs and uncertainty of new building projects.
Building a House Is More Unpredictable Than Ever
Between building a home and buying a home, building has typically been considered the riskier option. Unfortunately, this route is now more unpredictable than ever before. This is partly due to the recent collapse of several building companies, such as Probuild and Condev, who both cited material costs and market conditions as driving factors.
These collapses present a new level of financial risk for anyone who intends on paying a construction company to build their home. This was the experience of one couple who had to pay an extra $130,000 to have their home finished after the building company they signed with suddenly closed down.
Buying Might Be the More Affordable Route
Given the labour shortages, rising material costs, and lack of predictability associated with building a home, buying may be the more affordable option. Property prices may be rising, but the risks that come with building a home right now shouldn’t be overlooked.
For many, the risks of signing with a construction company in Australia right now are too significant. Why should you have to deal with high building costs when there are pre-existing homes that may offer everything you’ve been looking for?
Find a Pre-Existing Home for Your Family in NSW
Want to avoid the unpredictability and high costs of building a home? Buying a pre-existing home may be the better route for you and your family. If you’re discouraged by the rise in property prices in NSW, you should consider hiring a professional real estate agent that can find you the best deals available.
With their negotiating skills and knowledge of house sales, house appraisals, and house value, they can properly advocate for your interests every step of the way. If you have any questions about buying property in NSW, please don’t hesitate to contact the team at R&R Property.