Building vs renovating

Building a new home from scratch or renovating your existing one can be a great way to get the home you’ve always wanted. Check out our Building and Renovation factsheet (PDF 268kB), or read on to find out some of the pros and cons you should consider, and a few tips to keep in mind.

Building a new home

Some people really enjoy the opportunity to participate in the design and build process, and the feeling that they’ve stamped their personality on their own home. Others may find the experience a bit more challenging.

So before you decide to build, consider the advantages and disadvantages. Also create a budget, this is relatively straightforward – if you'd like some help, contact us.

When you're building or renovating, your home loan is approved for the full amount, but you draw it down in instalments as the building work progresses.

Advantages of building a new home

  • You get the kind of home you want (within your budget).
  • You choose the house, fittings and appliances you want.
  • You can enjoy the personal satisfaction that comes from being involved in your home’s design and build process.

Disadvantages of building

  • The building process takes time and effort and it can be stressful.  If you decide to project manage the build yourself, you may need to manage a variety of relationships like the builder, designer, and architect.
  • Some building projects may go smoothly from start to finish, but be prepared that it may take longer and cost more than planned. Its best to factor in a contingency for cost and time overruns.


Renovating your home can be a lot of fun and lets you incorporate the features and styles you’ve always wanted. As with building a home, renovating can sometimes be stressful or the final result may be different to what you originally planned.

So before you decide to renovate, consider these advantages and disadvantages:

Advantages of renovating

  • If you like the area you live in, renovating your existing home is a great way to get the type of home you want while staying in an area you know and love.
  • If you’re looking to sell your home, some well thought-out renovations could add value to the sale price and make it more attractive to potential buyers.

Disadvantages of renovating

  • Depending on the extent of your renovations, the cost could be very expensive. Working around an existing structure has its own challenges as opposed to building from scratch.
  • You may run into delays or extra costs due to unforseen problems (e.g. structural issues) that could not have been anticipated before you started.  Renovating certain parts of the house may mean you have to move out for a while which can add to the cost.

Other things to consider

How are you adding value to your property?

  • Improving flow – this makes it easier to get around your home, which can be appealing.
  • An indoor-outdoor flow is also a much sought after feature.
  • Landscaping – utilize your land with lawns, gardens or entertainment areas to make a big difference to how others perceive your home.
  • Better lighting (including more natural light) – this makes your home feel more inviting and spacious.
  • You should get legal advice about the contract before signing.

Be careful not to over-capitalise (spend more on renovations than you are likely to get back if you sell).  Consider the following:

  • Spending too much – location plays a part in determining property values and how much potential buyers are willing to spend.
  • Unusual or very personal features – they may be important to you but potential buyers may not share your views.
  • Taking away features – for example, removing a bedroom to make it into an office. Doing a bit of research on your area will provide insight into what living spaces are most desirable. Neighbourhoods with a number of young families the number of bedrooms is generally an important factor for buyers.

ANZ lending criteria, terms and conditions and fees apply.

This material is for information purposes only. Its content is intended to be of a general nature, does not take into account your financial situation or goals, and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommended you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financial product. If you would like to speak to an ANZ Authorised Financial Adviser, please call 0800 269 296.

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