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Buying a new home can be one of the most stressful events in your life. At Mortgage Talk “Mortgage Plus Bond Originators”, our friendly experts take the hassle out of financing your new property with simple, independent advice on the best range of mortgages to suit your individual needs.

One of our independent mortgage advisers will aim to find the mortgage to suit you and handle all of the arrangements with your mortgage lender. We can also help you find legal assistance and provide advice on life assurance and property insurance so that you can protect what’s important to you.

Our friendly, straight talking team will update you every step of the way, right through your move.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Those looking for a new home often ask: what is the better option, to build a home from scratch or to buy an existing one?

Adrian Goslett, CEO of RE/MAX of Southern Africa, says there is no right or wrong answer to this question. However, each option should be cautiously worked out from a financial point of view and carefully considered according to individual requirements.

“In the past it was considered more cost effective to build a new home, but more recently the recession and reduction of property prices coupled with increased building costs has meant that buying an existing home is now often the more cost effective option,” says Goslett.

This is backed by a report released by Statistics SA which shows that building costs have increased substantially over the past year. This if reflected in the fact that the value of building plans passed by the larger municipalities increased by 4,9% during the period January to June 2011, compared to the same period in 2010. This calculation is concluded at the current building prices. The largest increase in building costs reported was for residential buildings, which increased by R1,12 million or 8,9% for the same period.

Jacques du Toit, a senior property analyst at Absa, said that existing homes are currently 29.5% cheaper than new homes in the current market. He said that building an average home will cost in the region of R1,5 million, while the average price of an existing home with the same specifications is around the R1,1 million mark.  He attributed the gap between the building and buying cost to the significant housing price drop over the last few years, while building contractors have been unable to reduce their costs largely due to the cost of commodities such as materials and labour.

“Not every homebuyer will make the decision on whether to build or buy based purely on the cost and some still opt to build a home to their particular specifications. And although the slowdown of the market means that buyers are spoilt for choice with the large amount of existing properties for sale at fair market value, the question to build or buy is still not an easy one to answer,” says Goslett.

On the one hand, many people would like the creative control and freedom to design and build their own home. The flipside to that coin, however, is that most people have fairly limited knowledge about designing or building of a home.  There is also the risk of building being affected by other external aspects such as delays due to power outages and bad weather.  Possible petrol prices hikes will increase transport costs, which in turn will increase the cost of the building material or labour.

According to Goslett, a challenge that buyers could face is the fact that in most established areas there are very few vacant stands on which to build residential homes – if there are any at all.  He adds that while a newly built home may have the benefit of the initial low maintenance and the various guarantees that come with new workmanship, there is no guarantee on the future of a new neighbourhood and return on investment.  “Whether planning to build or buying an existing home, the location of the home and proximity to amenities is something that should always be considered,” says Goslett.

“Property should be viewed as a long term investment, so whether buying an existing home or building your own, it is always important to do the necessary research and make a decision that best suits your requirements, both now and in the future.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za