Building instead of buying can be a smart move

  • 30/11/2017
Phil and Sarah Boughtwood have given themselves a leg up the housing ladder by building their own home.
Phil and Sarah Boughtwood have given themselves a leg up the housing ladder by building their own home. Photo credit: Supplied

Aucklander Sarah Boughtwood had always dreamed of building her own home. But standing in the middle of a muddy plot of land, heavily pregnant with a toddler in tow, the reality of the task ahead was sinking in.

Construction had stalled as a retaining wall, which should have taken a few days to put up, took six weeks.

"It was insane," the 29-year-old said. "I turned up at [the building company’s] offices with my big belly and said 'this has to change or I'll be doing it at 37 weeks' pregnant myself.'"

The stress of the process, a perceived shortage of land, and a sharp rise in the cost of materials are often touted as reasons not to build your own home. But for some, it can be a savvy way to get into the housing market, or step up the ladder.  

Sarah and her husband Phil, 32, had no trouble finding land, as long as they were prepared to move out of the city.They bought their 660 square metre section in Millwater, on Auckland's northern fringes, for $445,000. Just up the road, earthworks are starting for 20,000 new homes.  

ANZ Mobile Mortgage Manager Rachel Holding said an Auckland land shortage is not as bad as people think. 

"There is still plenty of land available in places like Millwater and Orewa and there will be more " she said.

Rachel's tips for finding land:

  • The outskirts may be closer than you think, as more companies move offices out of the CBD to places like Albany
  • Sections will become available as homes are subdivided under the new council unitary plan
  • Follow new infrastructure - the Puhoi to Warkworth project will provide a key transport link to make this area more accessible. 

The Boughtwoods bought a house and land package through a building company, and although Phil had decent DIY skills he learnt "from YouTube", they left the project management and the build to the company.

ANZ’s Rachel Holding worked with the couple from the start. She said first-time builders should be careful about how much they try to do themselves. 

"In most cases, leaving the build to the building company to manage will not only be more cost-effective than trying to self-manage, [it] will often expedite the project completion.

"Something else to consider is how your lender will view the impact on your income whilst you take time out to manage the project and therefore your ability to service the lending."

Understanding the building company's contract:

  • Get legal advice.
  • The ideal contract is fixed price, with no provisional costs.
  • Provisional costs - earthworks, drainage and excavation - are only estimated. If they overrun, you may have to pay extra.
  • Ask 'what do you do that is over minimum code?' Some companies include LED lights, extra electrical plugs, or garage insulation that will save you money later.
  • Remember the extras: landscaping, fencing, curtains won’t be part of the package - but your bank loan needs to cover them.
  • Make sure there is a completion date.  

Sarah and Phil planned their dream house - four bedrooms, two lounges, two bathrooms but said they took care not to overcapitalise.

"We didn’t get carried away getting top of the line everything," Phil said.

Rachel said the biggest assumption some people made was that they could get more money if they needed it. "People don't have endless incomes, so therefore we can't lend them endless amounts of money." 

Stopping a budget blowout

  • Think smaller. Homes have doubled in size in a generation. Could you lose 20 sq m?
  • Know what you want - changing your mind will delay the build, and cost you money
  • Know what you could lose if your budget overruns
  • Consider using cost-effective materials when selecting tiles, cladding and flooring.

Above all, both Rachel and the Boughtwoods advised patience.

"Whatever time frame they tell you, double it," Sarah said. She wasn't pregnant when they started. By the time they got the keys, Baby Harper was 3 months old, and Sarah's parents had put them up, rent-free, for 15 months.

"I'd happily build again but not if we were bunking down with the in-laws," Phil laughed.

But it helped the project come in under budget at $920,000. Similar homes are selling in the neighbourhood for $1.1 million. 

"We got a beautiful brand new house, what we wanted, and worth more than what we paid,” Sarah said.

"It's not a walk in the park, even with an outside company doing it, but it definitely hasn’t put me off building again."

This article has been created for ANZ.  For more help finding the right home loan solution for your needs, visit

ANZ disclaimer: 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.