Sydney is one of the most populated cities in Australia. Between 2011 and 2021, Sydney had the second-largest population growth in the country after Melbourne. Being a capital city, Sydney boasts of the epitome of urban living, with access to upmarket localities and state-of-the-art amenities and infrastructure.
The cost of having a home in Sydney is one of the highest in the country. Therefore, many first-home buyers or buyers, in general, opt for project homes in Sydney. The project home is built in high volume to a pre-set design. Project home builders afford prospects a variety of ready-designed options to choose from.
There are a few things you must not turn a blind eye to when it comes to project homes. Owning a home can be tricky if you are ignorant and will only lead to increased expenditure. Here is a deep dive into the possible hidden costs associated with your home.
1. Lenders Mortgage Interest
Usually, buyers must pay an upfront deposit to the seller as security. In most cases, the deposit should be more than 20% of the total cost. If you are not putting down at least 20%, you most likely will have to pay LMI – Lenders Mortgage Insurance.
LMI is a one-off premium added to your home loan and levied primarily because your deposit was not large enough. LMI is a safety net for lenders to compensate for any loss incurred in case you can not repay your loan.
2. Coastal Conditions
If your project home is near the beach, look out for Coastal Conditions being slapped onto your property! Coastal Conditions are guidelines set by the National Construction Code requiring varying degrees of protection for homes constructed within 10 km of “breaking surf” (that is, the sea).
For homes closer to the beach, the building materials must be stronger and more durable for conditions dictated by closeness to the coast. This includes the wind or moisture in the air.
However, you must do your research so that you can challenge these clauses if you feel that the conditions should not apply to your home. It will save you a few thousand dollars!
3. Third-Party Building Inspector
A third-party building inspection is not as much of a hidden cost as it is a recommended investment. As the name suggests, a building inspector inspects your home at various stages. The building inspector is separate from the builder.
An inspector walks through the house and inspects for “defects” – any discrepancies in the design of the house. These defects then need to be amended by the builder.
These are the stages at which you can engage the building inspector:
- Slab goes down
- Wall and Roof Framing
- Lock-up stage
- Practical Completion or Handover
Going for project homes in Sydney is a cost-effective way of housing in the expensive capital city. Buying a project home comes with certain costs that can surprise you if you are unaware. These include the interest levied on you if you put in a small deposit amount and conditions due to closeness to the coast.
You need to spend your own time doing your research about these hidden costs so that you can save quite a few dollars! Check out all the top project homes around Sydney and find one of the best housing solutions.