With property prices continuing to climb across Australia, many buyers are turning to new builds as a more affordable and flexible alternative to purchasing existing homes. According to recent data from the Housing Industry Association (HIA), new home sales surged by 25.9% in September, with a 4.0% increase over the quarter – a clear sign that building is gaining momentum.
Why Building Makes Financial Sense
HIA Chief Economist Tim Reardon attributes this trend to a combination of lower interest rates, government incentives, and the rising cost of established properties. In many regions, the cost of building a new home now compares favourably to buying an existing one – especially when you factor in the potential for customisation and long-term value.
But while building can be a smart financial move, it comes with its own set of challenges, particularly when it comes to financing.
Financing a New Build: What You Need to Know
Unlike buying an existing home, financing a build involves progress payments, staged loan approvals, and potential cost variations. Careful planning is essential to avoid budget blowouts and cash flow issues.
Here are five key tips to help you finance your new home build with confidence:
1. Set a Clear Budget – With a Buffer
Include a 10–15% contingency for unexpected costs like material price changes or design tweaks. A realistic budget is your foundation.
2. Get Pre-Approval Early
Pre-approval helps define your borrowing power and gives you clarity when planning your build. It also strengthens your position with builders and suppliers.
3. Understand Your Loan Structure
Construction loans are released in stages – typically at slab, frame, lock-up, and completion. Know when payments are due to avoid delays.
4. Plan for Cash Flow
You may need to cover rent or an existing mortgage while your new home is being built. Make sure your finances can handle the overlap.
5. Stay in Touch With Your Lender
If your build costs or timeline change, notify your lender immediately. Staying proactive helps avoid funding issues and keeps your project on track.
Ready to Build? Let’s Talk Finance First
Before you start comparing floor plans or choosing tiles, let’s chat about your finance options. At CoastFin, we’ll help you structure your loan to suit your build, your budget, and your future goals.
Contact us today to start planning your dream home with confidence.
