Should I Buy a Spec House?
More and more people are looking to enter the property market, either as a homeowner or as a property investor. Real estate agents are looking to get as many people in these homes as possible. However, the primary problem in the market is supply. There aren’t enough houses in the market to match everyone’s desire for a home. That problem has seen the rise and the growth of the spec house across Australia. With these housing options becoming more available than ever, it begs the question … should I buy a spec house?
Should I Buy a Spec House? – Pros
Spec Houses are Cheaper
Spec houses are a cheaper alternative compared to designing and building a house yourself. You save yourself on expensive design services, such as quantity surveyors, architecture, painting, finishing, furniture, appliances and landscaping. Alongside this, the fact that these houses are being built to an already specified and tried design, there are savings associated with the economies of scale. Materials, appliances and furniture are purchased in bulk, resulting in overall savings. There are also fewer architectural and structural concerns and issues that arise during the construction, resulting in a cheaper price.
Comparing the average cost/square metre, a basic spec house costs on average $620-780/square metre, compared to a custom-built house, which costs on average $1500-$3000/square metre. A large spec house costs between $1000-$3000/square metre, compared to a deluxe, large custom-built house, which is $2,500-$4,000+/square metre.
Buying a spec house removes the hassle of delving into the details of construction. You won’t need to worry about any of the design and structural issues that arise when building a house. Have you seen an episode of The Block? There’s enough stress in a week for those contestants to last a lifetime! This quicker and easier construction will also mean a quicker move-in.
Alongside this, the financing arrangements for a spec house are far less complex than a custom one. There are fewer ongoing expenses with a spec house, as well as the significantly reduced likelihood of a project time or budget blowout.
Should I Buy a Spec House? – Cons
A spec house offers no customisation design-wise. This means that if you are looking for your house to reflect some of your personal choices, this cannot occur. These types of houses aren’t unique, and can sometimes look generic. This plain style can also make it difficult to renovate in a different style. This limits the ability to add significant home value-adding renovations like a kitchen upgrade.
Rigid Design and Features
Plans for a spec house cannot be altered. This means that if there is a design quirk or a feature that you do not like, or would not require, these cannot be changed. This means you could end up paying more for a feature that you do not need. Alongside this, certain features such as a slope, shallow soil, and other geographical anomalies can limit the construction and “out of a kit” element that spec houses bring. This has the potential to reduce the affordability and convenience that make spec houses attractive for home buyers and property investors.
There’s a lot of factors to consider when you’re looking to build a house when weighing up whether spec houses are right for you. Our teams of experts at Vision Property and Finance have helped hundreds of clients make informed decisions with their property. If you’d like a free consultation, please get in touch with us here.