Should More Australians Be Building Their Own Home?

Property prices are continuing to soar and fewer people can make it onto the ladder. However, there could be a solution to the housing crisis – what if more Australians were to build their own home?

Self-builds have been gaining popularity across the world. In some parts of Europe, they account for almost half of all property built today. In fact, in Germany alone, the number of self-builds completed per year is thought to be over 100,000.

There’s definitely a lot more effort required in a self-build – you have to find the land, find an architect to design your property and then find contractors to construct it. The construction process can take nine months and there is always the chance that bad weather could cause delays.

That said, self-builds are often much cheaper than buying prebuilt housing. Even with the cost of buying land, hiring an architect and hiring contract constructors, you’ll still pay less than you would buying a new build largely because there’s no seller involved. Not only that but self-builds can be personalised so that they’re cheaper to run - eco-friendly features like insulation, solar panels and even rainwater recycling can save energy costs.

Construction costs are on the rise and many contractors are starting to charge more. However, it’s possible to still cut costs by sourcing materials oneself as well as using companies like Freo Group to outsource tools like cranes. It’s more work than simply leaving it up to contractors to organise, but it pays off.

As with funding regular properties, there are self-build mortgages available that can help pay for the entire project. However, higher down payments make these mortgages less accessible for the everyday person. Many lenders want 20% of the property price. The cost of land is also often not covered by these mortgages (although there are separate land loans available from companies like Canstar that can cover this expense).

Fortunately, there are grants out there available to people building their first home – in Queensland and NSW, these grants can be as much as $15,000, whilst other territories offer $7,000. This money could be a useful contribution towards such a mortgage.Another obstacle preventing many Australians from building their own home is the scarcity of land in the cities. Whilst there’s no shortage of land on the city suburbs, few people are willing to live on the outskirts due to longer commute times to the city centre and higher travel costs. Land that is located more centrally is often more expensive due to the greater demand – unless people inherit it, there’s not much chance of securing this land.

Right now, 9 in 10 Australians spend more than ninety minutes a day commuting. Perhaps more people will feel comfortable living further out as companies start to accept more remote workers. Either this, or companies will have to start creating more work opportunities on the suburbs – which seems unlikely.