Saturday, September 29, 2018

How to Build a Home Part 2: Where to Build

This is often a very difficult decision to make. At first glance, you might just think - build where you want to live.  But where is that exactly? How do you want to live? Is it affordable to buy land in your desired area?  Are there jobs?  What sort of land should I be looking for..big/small, in town, out of town, close to friends and relations.  There are many factors that go into the decision making.  There might be many trade offs for example, building further out where it is more affordable as land is cheaper.  But then the commute might be longer?

In my case I decided upon a small country town about half an hour from a regional city.  I could not afford to buy in that city, and I like the natural environment of my town, which the bigger city lacks.  There are other towns nearby which have cheap land as well, but don't have the same natural environment.  My town is nestled beside a river and there are beautiful gum trees.  I can swim in the river, and walk in the bush.  There are kangaroos and lots of birds. A lovely small public swimming pool is down the road.  All 5 minutes walk from home.  But what suits me might not suit you.

You might want to write up a list of all the desirable features that you want in a location -close to this or that, near a school or close to transport.  Try and narrow down the list to be specific about what you want or what you think you want. Being more specific will help narrow down the search quite a bit.  Costs need to be considered.  Land is cheaper in location X, but location X is further (from work or family).  Can you live with  that, or do you need to 'think outside the square'?  Perhaps for a first build, maybe a small block with a modest home is best.  That way you are getting into the market, and off the rental road.

If  you are living in one of the bigger cities, and wish to remain there, the choice might be dictated largely by land availability. Land availability is one of the key drivers of cost.  Other factors include parcel size, location,  proximity to services, building constraints etc.

Look around, and see what is available.   I am a big believer in research.  Research the available land market as you would any other market.  If you are set on building a new home, stick to that. If you are not sure, then perhaps you can look at all options such as renovating, or buying a ready made home, or even a flat. There are advantages and disadvantages of each of these options.

Do your homework, and work out what you can afford to pay.

Here's an example of doing research based on the Sydney land market:
  • at time of writing (September 2018) the median price of land in Sydney is around $467,500 HIA-CoreLogic Residential Land Report (reported in   Remember the median price is not the average or mean price, it is the midpoint of all the sales over a period of time - in this case the March 2018 quarter)
  • at time of writing, a quick search of the cheapest land in Sydney is a very small 250 sq. metre block in the suburb of Marsden Park at $349,000.  There are a few blocks around this price, but they vary in size. The biggest block around this price looked to be 500 sq.m.

The Melbourne market appears to be catching up to the Sydney market.  Prices there are as follows:
  • Median price is $359,000 (Sept. 2018, sources as above)
  • at time of writing (Sept. 2018), the cheapest block appears to be in Koo Wee Rup at $195,000.  It's right at the outer limits of what I call the metro area at around 74km to Melbourne CBD, hence the price. It is 800 sq. m. though.
  • There are several other small properties available at places like Wallan  (52km) around $277,000, but land size is much smaller.
Other options may include buying land that nobody else wants - it might be steep, or have other constraints.  A friend of mine bought a big block that had a big slope on it - making it hard to build on.  The solution was to use his relative's engineering skills to correct the slope so that a house on slab could be put down.  The end result was still cheaper then a comparatively sized level block.

Also don't forget land is only one side of the coin.  You might be able to pay a little more for land, and a little less for the home you put on it.  It's all about being smart - or financially canny.  In my case the problem of not being able to afford anything in Sydney was solved by a move and a change of lifestyle.  When somebody rings and asks if I am a renter, mortgagor, or home owner, I can proudly say I am a home owner!

Tuesday, September 25, 2018

How to build a home on a budget Part 1: My story.

So many people are put off building by the enormous costs. Land is expensive, materials add up, the labour cost is out of this world.  Add to that the stress, the decision making, the hard work, dealing with headaches, making stuff-ups..the list of negatives seem endless.

What if there was another way?  Is it even possible to have a place that you can call your own?

But lets turn that around - what about the positives - creating a space that you can truly call home, learning new skills, making good decisions, fixing stuffups etc.  All positive, and incredibly rewarding.
Anyway, enough of the deep stuff, and more about me.

I am an owner builder, with no special skills in building or carpentry. Before building my current (humble) home, I had never used a hammer for more then 5 minutes. But I do have a can-do attitude, and the ability to learn.  I call myself an 'economic refugee' from one of the major cities.  I was never able to afford anything in the major cities and was just existing week to week - paying enormous rents for a small apartments in a sea of similar (boring) buildings.

So about 8 years ago I moved to the country, got out of the rat race, and found cheap land I could afford.  And yes there are jobs in the bush! I have found many types of work, made new friends, and learnt many new skills.  Because it is so much cheaper in the country I can afford to build a home on a low income.

So where to start?  For me, I just started looking around where I lived in regional NSW.  I found some cheap houses and land, in places which I thought wasn't that attractive - out of the way, in small towns or with distances to travel.  I even found one small house for $69,000 (in 2011) that I nearly bought. Yes, house prices are that cheap in the country!  I ended up buying a quarter acre in a small country town by a river for less then $20K.  When you move to the country, it opens up possibilities that don't exist in the cities.

But saying that, not everybody wants to live and work in the country.  But for now that is me.