If you’re a first home buyer in Victoria, chances are you’re asking yourself a lot of questions. Top of mind are questions like: is it better to build or buy a house? Should you build a new home or buy an established property? And what about new homes that are ready to move into?
There's no one-size-fits-all answer. Each option comes with its own considerations, from affordability and location, to timing and lifestyle needs. This guide will help you weigh up what matters most to you and make an informed decision based on where you are now, and where you want to be.
Start with your why
Before deciding whether to buy or build a house, it’s worth thinking about the main reasons for your purchase. Consider whether you're planning to stay in the home for a long time, flip it and move on or start an investment portfolio. This will help guide your decision making.
Is this your forever home?
If your dream is to buy your own home where you’ll raise a family and settle long term, building might give you the flexibility to create a space that’s truly tailored to your lifestyle now and in the years ahead.
Breaking into the market
If you're looking for a way to break into the market, a completed new build might suit your immediate needs while offering quicker access to home ownership.
If it's all about location
For new home buyers who have a specific location in mind, whether its close to work, family or in a specific school zone, buying an established home might be the simplest way to achieve that goal.
A stepping stone to something more
Some first home buyers are thinking strategically, planning to use their first property as an investment or stepping stone. If that's the case, capital growth potential or rental appeal might outweigh the desire for custom design features.
Escape the rental market
The decision to build or buy is often about more than bricks and mortar - it’s about gaining security and control. For budget-conscious buyers, affordable new homes or townhouses, especially in Melbourne’s growing outer suburbs, can be a smart way to transition from renting to ownership
By understanding your “why” from the outset, you’ll be better placed to choose the option that aligns with your own circumstances, goals and financial strategy.
Building a new home
Building your own house is an opportunity to create a home that fits your lifestyle and reflects your style. From layout to finishes, everything is customised so you won’t need to renovate later or compromise like you might with an existing house.
Most new builds are located on vacant land in Melbourne’s outer suburbs, where house and land packages are more affordable. With the help of a construction home loan and government incentives like the First Home Owner Grant (if the home is your primary residence) and stamp duty savings, a new home can be achievable. Look for builders with fixed price contracts so you know exactly how much you'll be paying up front.
Making the decision to build a house offers the opportunity to bring your dream home to life using the latest high quality materials and energy efficient design.
Pros:
- Full creative control over layout, finishes and inclusions
- Built to the latest energy and construction standards
- You may be eligible for the First Home Owner Grant (up to $10,000)
- Access to construction loans can free up cash flow during the build
- More energy efficient options can save you money on energy bills long term
Cons:
- Longer timeframe to move in (6–12 months)
- Decision-making required during the build process
- You may have to pay stamp duty for purchases over $750,000
Buying a move-in ready home
One option that can be often overlooked is buying a brand new completed home. Our move-in ready homes are newly built and fully finished homes, ready for you to move in.
These homes are ideal for first home buyers who are ready to settle but don’t want to compromise on quality or style. They remove the need to coordinate a land purchase, select floorplans or wait for build completion, making them a highly practical choice for time-poor professionals, growing families and anyone trying to break out of the rental cycle.
With new options released regularly, these homes are also an excellent alternative for buyers who may have missed out on securing a house and land package or who want a fixed-price solution in a growing community.
Pros:
- Brand new and move-in ready
- New options being released regularly
- No need to negotiate land purchase
- No construction or selection process required
- Energy-efficient and built to modern standards
- Eligible for First Home Owner Grant (if under $750,000)
- Stamp duty concessions may apply
Cons:
- Less opportunity for customisation
- Availability may be limited based on location and timing
Buying an established home
Purchasing an existing property can be an attractive option for people who want to move quickly and settle into a familiar neighbourhood. However, buying an established home can come with a degree of uncertainty. You may not know the full extent of what you're buying until after you've moved into an established house. Hidden maintenance issues, such as ageing plumbing, wiring or structural concerns, can lead to unexpected expenses down the track.
Renovations such as updating the floor plan, upgrading bathrooms or kitchens or improving heating and cooling can also involve significant time and cost. In today’s market, rising costs can quickly inflate the price of a seemingly modest renovation.
Pros:
- Can offer fast settlement and move-in timeline
- Easy to gauge market value based on historical sales
- Stamp duty exemption or concession may be available
Cons:
- Limited design and layout options
- May need renovations or updates to suit your needs
- Older properties are more likely to have maintenance issues and other hidden costs
- Less likely to meet modern energy efficiency standards
- Not eligible for First Home Owner Grant
Is it cheaper to build or buy a house?
Cost is often a deciding factor for first home buyers but determining if building a house is cheaper than buying isn’t always straightforward. In Victoria, house prices, land prices and availability, construction costs and available incentives all influence what's most cost-effective. So does your timeline and the size and structure of your home loan.
Here’s what to consider when comparing the real cost of building versus buying.
The housing market
The median price of an established home in Melbourne is forecast to rise to $1.1 million in 2025-2026. This figure offers a useful reference point when considering whether to buy an existing home or invest in a new one. Building a house can cost between $2,200 and $5,500 a square metre depending on the design, materials and whether it's single or double storey.
We offer brand new, affordable, move-in ready homes in key growth areas that are a compelling option for budget-conscious buyers who want a new home without the build process.
Hidden costs of older properties
Older homes may seem appealing, especially in established suburbs with strong transport links, but they often come with maintenance issues and other hidden costs. Renovating ageing plumbing, heating, or interiors can quickly inflate the total cost, particularly with today's high material costs.
Government support
Eligible first home buyers can access government support, including grants and concessions, to help reduce upfront costs. However, some, including the First Home Owner Grant, are only available for newly built homes homes.
Stamp duty costs
First home buyers may be eligible for more than one exemption, concession or reduction of stamp duty. In most cases, the home can be new or established.
Energy efficiency in new homes
New homes in Victoria must meet strict energy performance standards including achieving a minimum 7-star energy rating. This means they’re generally better insulated, more comfortable and less expensive to heat and cool compared with older homes that may not have been built to the same standards.
Whether you’re building a new home or buying a completed home, energy-efficient designs and high quality materials can reduce your household costs for years to come. In contrast, older houses often require upgrades to meet today’s expectations for comfort and performance.
Buying vs building a house: what’s right for you?
Deciding whether to build or buy a house ultimately depends on your circumstances. If speed and location are top priorities, buying might suit. If design flexibility and energy-efficiency matter most, building could be your best path. Or, if you want a brand new home without the wait, our move-in ready homes are an ideal middle ground.
Explore your options with Henley
We help first home buyers achieve their home ownership goals. Whether you want to build from the ground up, choose from one of our popular house and land packages, or move into a finished home, we have options to suit your lifestyle.
If you want to build a new house, our Breakthrough collection offers the most affordable way to get into a new home sooner. This range of homes features thoughtfully-designed floorplans that combine timeless style, energy efficiency and affordability.
If you're ready to move in, explore our move-in ready homes or visit The Dales in Bonnie Brook to see our latest completed homes in a thriving, community-focused estate.
