New information reveals that knocking down to rebuild your home is now practically an Australian tradition. In fact, the Housing Industry Association has forecasted that the number of new dwelling commencements will reach a staggering high of 232,500 during 2015 and 2016, a decent number of which might be knock down, rebuilds.
The HIA’s chief economist Harvey Dale commented on the extent of the housing boom in an August 24 media release:
“The current new home building boom is unlike any other that has come before it. It is the longest and largest in Australia’s history and has provided an unprecedented economic boost to the nation.”
Why then are Australians knocking down and rebuilding there homes en-masse? And how canyour home loan finance the change? Let’s have a quick look at the pros and cons to find out.
The benefits to knocking down and building your own home are many, but these are the most prevalent:
- Your home will be brand new, and can be customised to any requirements you have.
- You will add value to your land by building brand new property on it, increasing its resale value.
- May be cheaper than buying a new property.
There are some drawbacks to knocking down and rebuilding, but these can be minimised if you take proper care and leave wiggle room in your finances to take care of any problems:
- You’ll be delocated for a period of time and may have to stay in hotels, or with friends or family.
- Finding a trustworthy builder – the most foolproof way to make sure your builder is reputable is to check that they’re registered with a reputable organisation such as Master Builders (you can do this online). It’s also worth asking them if they’re insured as many reputable builders will be happy to show you this information.
- Council approvals – getting approval from the council may be a long-winded process requiring a lot of your time. Your builder can help make sure that everything is legal and assist you with the approval process, which differs from state to state.
Planning for everything
Have plenty wiggle room left over in your finances so that your rebuild goes off without a hitch.
In order to finance your rebuild there are several options available. You may want to access existing equity in the land portion of your property or perhaps use a construction loan, with which your lender will release funds to you as your rebuild progresses.
It can be a hard to know what’s right for you, so Smartline’s local mortgage brokers can help you pick a suitable loan product for your needs. We can help ensure that you have plenty wiggle room left over in your finances so that your rebuild goes off without a hitch no matter the circumstance.
You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!