Posted on September 09, 2020

Building a new home in Melbourne has so many benefits—from minimal maintenance to finding the design that’s perfect for your needs.

Oh, and let’s not forget the government grants and concessions!

But before you dive into this new adventure, make sure you’re in a good position to see the home building process through.

Read on to learn the steps involved in building your new home in Melbourne.


Step 1: Consider the costs

First up, building a new home is a huge commitment. You’ll need to be 100% clear on the costs involved, even the hidden ones, before you start.
Aside from the cost of the land and the house, you’ll have other expenses, like:

  • stamp duty
  • legal fees
  • bank fees
  • mortgage insurance
  • loan interest
  • conveyancing
  • asset protection
  • community infrastructure levy

Depending on your land, you could also have extra site costs. If your block is sloping you might need additional materials meaning you will incur higher site costs. Our top tip: flat is usually best.

We recommend getting a rough idea of how much you can afford in terms of repayments. Keeping in mind the lifestyle you want to live!

Once you know what your budget is, then you know what your options are.


Step 2: Get pre-approval for a loan

Now you have an idea of your costs, it’s time to approach the bank about a possible loan.

With a pre-approval, the bank agrees to give you a loan, but the agreement is not set in stone. If your circumstances change, your loan could be declined.

A pre-approval guides you in your budget when choosing your land and home design.


Step 3: Apply for grants

If you’re a first home buyer, you could be eligible for the First Home Owner Grant of $10,000 in Melbourne, or $20,000 in Regional Victoria. You could also qualify for a transfer fee concession, also known as a stamp duty concession.

These are both great incentives to help you get a foot on the property ladder.


Step 4: Find land

Choose land in an area of Melbourne that fits your lifestyle.

Look for amenities like shopping centres, transport links, hospitals and public transport. Be open to new estates which can offer a very achievable step in the property ladder.

Another option is to choose a house and land package. The benefit of this is that you can choose your own home design to suit your needs, while the builder takes care of the complicated building process for you.

Or alternatively, you could do a knock-down rebuild, where you replace an old home on your chosen block of land. This means you can stay in the location you know and love.

If you build on your own land, make sure your block is compatible with your home design.


Step 5: Get an expert inspection

You’ll need to get an expert to inspect the site to make sure it’s okay to build on.

By choosing a house and land package, you can skip this step. Your builders will already have inspected the sites and approved the lots.


Step 6: Choose a builder

One of the best ways to research builders is through word of mouth. Ask friends and family who they have had a successful building experience with.

Another great way is to contact the Master Builders Association and Housing Industry Association for recommendations. They will recommend builders who are good with sustainable designs.

You can also do your research through online channels or display homes. Look for designs that align with the type of home you would like to build.

Once you’ve narrowed down a list of potential builders, ask for quotes.


Step 7: Choose a home design

Once you’ve bought a block of land, it’s time to find a home design you like. Choose a builder with a large range of sizes and styles.

Alternatively, you can DIY! This gives you the ultimate freedom but little support from knowledgeable experts.


Step 8: Create a building contract

Once you’ve chosen your builder, they will prepare your building contract. The contract needs to be air-tight to avoid building mistakes.

The contract will follow the Master Builders Association of Victoria (MBAV) or Housing Industry Association (HIA) guidelines.

At this stage, you’ll be able to review your upgrade items and extras.

Double check that your contract complies with building laws in your local area and ensure your builder is responsible for getting the right licences and permits.


Step 9: Get your loan & sign the contract

Now’s the time to sign your building contract so that you can lock in your home loan.

Review your loan with a conveyancer or solicitor.

Now you can sign your loan contract and start building!


Step 10: Get insurance

To protect your land and new property during construction, you will need insurance. If going through a builder, they will do this for you.


Step 11: Monitor the build

Depending on your builder, you can monitor your home construction progress with regular updates, photos or even site visits.


Step 12: Finish construction and move in

Soon after construction ends, you’ll be notified of completion.

You’ll get the builder’s written authority that the building is completed along with all relevant warranties and certificates. Then they’ll take you through your new home in a final inspection to hand over your keys!

Congratulations, it’s time to crack open the bubbly and move into your new home!