As property prices continue to rise, many Australians are finding better value in building a new home rather than buying an existing one.
According to recent data from the Housing Industry Association (HIA), new home sales increased by 25.9% in September and 4.0% over the quarter.
HIA chief economist Tim Reardon explained that lower interest rates, government incentives, and rising property prices have made new builds a more attractive option. In many cases, the cost of construction now compares favourably to purchasing an established property.
However, financing a build involves a few unique challenges. Progress payments, loan approvals, and potential cost changes all require careful planning. While building can offer long-term value and access to various incentives, managing cash flow and unexpected costs can sometimes be difficult.
Five Tips for Financing a New Home Build
- Set a clear budget – Include a 10–15% buffer for unexpected expenses.
- Secure pre-approval early – It helps define your borrowing capacity and allows you to plan your build with confidence.
- Understand your loan structure – Construction loans are paid out in stages, so know when each payment is due.
- Plan for cash flow – You may need to cover rent or an existing mortgage while your new home is being built.
- Stay in communication – Inform your lender promptly if there are changes to your costs or building plans.
Thinking about building? It’s worth exploring your finance options early — understanding how construction loans work can make your building journey smoother from start to finish.