Barbara Messer, ninemsn Money
A decade ago, options for building new homes were limited: either hire an expensive builder or architect, or invest in project home that looked identical to every other house in the neighbourhood.
Today, the options are far more enticing, from installing ready-built prefabricated homes, which are assembled in factories and delivered by truck within 12 weeks, to investing in designer kit homes, which look nothing like the outdated McMansion-style kit homes of yesteryear.
State government incentives, such as the NSW government's Home Builders Bonus, also make it more affordable for home buyers to build from scratch.
With so many advancements in building technologies, Andrew Rumble, managing director of Art of Construction Australia, thinks people would be crazy to live in homes that are more than 20 or 30 years old.
"A decade ago, I would never have said knocking down and building was a better option than buying an existing property. Now I think you'd be mad not to," Rumble says. "Old inner-city homes have so many problems, from rising damp to termite damage and old pipes. Sometimes you're better off knocking them over and building something new."
Rumble suggests negotiating a fixed price with a trustworthy builder. "It's okay not to use an architect because they charge a 10 to 20 percent premium on top of the builder's fee and you've got no way of enforcing the budget to avoid cost blow-outs," he says.
If you can't find a builder or designer who will agree to a fixed rate, "stick to the big boys", says Rumble, who believes big, reputable construction companies can often deliver cost-savings that smaller builders can't compete with.
In NSW, the state government's Home Builders Bonus eradicates stamp duty on new homes worth up to $600,000, or vacant land worth up to $400,000. This includes off-the-plan sales, providing construction is completed by December 31, 2013. It also provides a 25 percent discount on stamp duty for homes that are already under construction.
Despite this incentive, many buyers believe the hassle of designing a new home outweighs the government's incentives. But if you do your research, however, building a home from scratch can be surprisingly easy.
"One of our clients went away on holiday for a month," says Jan Gyrn, managing director at Modscape, "while we demolished their property and installed a prefabricated home. They came to a brand-new house."
Despite the fact that prefab homes are designed to a template and assembled in a factory, today it's possible to tailor each design so no two homes are the same. At Modscape, 99 percent of its prefab homes are customised to fit each site, and Gyrn says the "configurations are limitless".
Modscape sells its prefab homes in urban, regional and coastal area for an average of $500,000, or more than $1 million for high-end designs, which, Gyrn suggests, emphasises the fact that "prefab houses are becoming a viable alternative to traditional building,".
Many construction companies offer a limited range of design templates, such as "kit homes", which use standard frames as the basis for each structure. Kit homes once had a stigma attached to them for their cookie-cutter designs, but today's designs have improved remarkably.
Regina Barnes, NSW sales and marketing manager at Metricon, says most residential housing designs now integrate indoor and outdoor spaces in line with the Australian climate, which lends itself to informal entertaining.
"I think designs have improved substantially over the last 20 years, there's been a definite shift towards removing formal dining spaces that people don't use very often, and creating homes that function around the way we live," Barnes says.
Gyrn agrees that building from scratch doesn't have to be hard. "We offer a one-stop shop for designing, engineering, seeking council and building approval, and construction. These processes are all managed in-house with a building process as short as 12 weeks. That's very appealing to the average mum and dad," he says.