close icon
search icon Apply phone 13 10 90

Steps to building your first home

Green Construction Loan

Low rate construction loan with added benefits for homeowners.

  • 3.63%
    discount var rate p.a.++
  • 4.08%
    comparison rate p.a.*

Green Construction Loan

Low rate construction loan with added benefits for homeowners.

  • 3.63%
    discount var rate p.a.++
  • 4.08%
    comparison rate p.a.*

The good news is there is a lot you can do to make the construction process as painless as possible. It won’t be simple – in fact building a new home may be one of the most difficult things you will ever do. But with good planning and research you can give yourself the best chance of a great result.

Follow these steps in building your first house  if you want and avoid any mishaps.

1. Talk to your lender about a construction loan

The first thing to do is find out how much you can borrow. This will help determine where you can buy and the type of house and land you can afford.

You will most likely require a construction loan, which is an interest-only loan that provides you with access to financing progressively to build your home in stages and keep repayments as manageable as possible.

If you can’t borrow enough money to build the home you really want, you might want to consider renovating your current home instead or waiting until you accumulate enough savings or borrowing power.

If neither of these options appeals to you, start working out what you are willing to compromise on (for example, the size of the house) in order to make building a new home a reality.

Remember, you can always make plans to extend down the track, working with your builder from the outset to allow for future works.

Also make sure you understand how payments will roll out to the builder while the home is under construction, especially if you are using a construction loan. On-time payments help keep building works on track and avoid delays.

2. Work out what you really want

It’s time to ask yourself the tough questions. There is little-to-no chance of getting what you want if you’re not clear on what that is in the first place.

Where do you want to live? The last thing you want is to construct your dream home in an area or on a block of land you’re ultimately not happy with. Whether it’s the city, the country or the coast, consider the size and type of blocks that will be available and how this might affect the sort of house you can build.

Vacant blocks in Australian capital cities are rare, so you’ll more than likely have to factor in the cost of buying and demolishing an existing home and all the council approvals and permits required if you want to live in the city.

Alternatively, buying a house-and-land package in a new development might take some of the stress out of building a your first home. Here, houses already meet the requirements of the block and many of the design decisions have already been made, with room for customisation.

If constructing on a vacant block, site and soil tests will need to be conducted to check for things such as underground rocks that could significantly affect building costs.

Remember the steeper the slope the higher the building costs, so what you might save on land you will likely end up spending on construction. Retaining walls are also a big expense, so be sure to understand where these might be needed and how much they will cost.

3. Features to consider when building a new home

How many bedrooms and living rooms do you want? Consider how everyone in your home will be using the different rooms and how these can be repurposed over time.

A playroom today could become a media room tomorrow. Or maybe you really want an extra living room for the kids to have their own hangout space when they’re older. A fourth or fifth bedroom might not seem necessary now, but could it be in five or ten years?

Moving house just for another bedroom when you could have included it in your build from the start is not a situation you want to end up in. On the flipside, if the kids are already older and looking to move out in the not-too-distant future, could you settle for a smaller house that’s easier to maintain?

Print out three copies of your house plans and date them now, five years from now and ten years from now. Designate rooms according to how you think they will be used at each stage of your life and find anything that needs to be addressed before work begins.

4. Choose the right designer and builder

Now is the time to reach out to your social network and ask for recommendations.

With so many designers and builders to choose from, good word of mouth will help set you on the right track. If recommendations come up short, consider experience and a demonstrated ability to deliver the type of home you’re after.

It’s also essential to find a designer and builder you feel comfortable with to avoid ongoing issues during the design and construction process.

If you’re buying off the plan, display villages will give you an excellent overview of the different builders and the types of homes they offer. Just remember display homes are usually built with all the added extras, which come at a cost.

Make sure you have a thorough understanding of what is included in the base price of the home. Items such as flooring (which some people choose to do themselves) are often excluded and can add thousands of dollars to your build. Same goes for driveways and landscaping.

Finally, be prepared for some things to go wrong. Maybe they could’ve been avoided, maybe they couldn’t. Just remember, how you choose to react to these problems or manage them is up to you.

Approach any mishaps with a calm and clear mind and keep the big picture – your dream home – in view. Hopefully all the hard work will have been worth it.

Do I qualify

About the article

As Australia's leading online lender, has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

Tags: building house