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Pros and Cons of New Homes as Property Investments

There are significant benefits of using a new home as a property investment. New homes as property investments eliminate many of the issues that are common to investing in older properties (maintenance and repairs) - but they are not without considerations that can affect returns in the short term. Whether you’re a first-time investor or looking to add to your existing portfolio, here’s what you need to know about choosing a new home for investment. How does a new home work as an investment property? Buying a newly built residential property for the purpose of investment works the same way as purchasing an existing property. Investors who purchase a new home for investment can lease out the property (once it is built) to prospective tenants in exchange for a consistent supply of rental income. On top of the expected gains from renting out a new home, there are other concessions that a new home can offer over an existing property. Namely, the exemption from payable stamp duty on the value of the home, as well as a period of warranty covering any issues in the first seven years. New homes in developing regions also have the potential to appreciate over a long term as the improvements in local infrastructure (e.g. roads) and increased accessibility to amenities (e.g. schools, medical facilities) are put into place. A new home investment is possible through: House and land package – both the property and the land it sits on are purchased together in the same package. The new home’s design can be chosen from a selection of options from different builders, based on personal preferences and investment goals. Some builders offer investors help in finding potential tenants to occupy the home once complete. Building a new home – investment funds will be used to finance the cost of building the new home. Investors work with building designer or architect to shape the future property according to their vision. Off-the-plan properties – similar to house and land packages, but with a lower level of customisation and no requirement for a construction loan. Investors are only required to pay the deposit upfront and the outstanding amount once the property is complete. Pros of purchasing a new home build for investment Low maintenance costs New home builds are new, which means little to no maintenance required within the first few years following completion! Attractive to tenants New homes are ideal for tenants – they are easier to keep clean, maintain, and offer new and advanced appliances. The average new home is also more energy efficient than older homes. A recent CSIRO study found that newly built homes featured up to 50% more airtightness compared to homes tested in 2015, which contributes to a lower need for heating or cooling appliances to keep the home comfortable. New home builds also typically feature modern home layouts and designs which drive up demand among those looking to rent, offering a higher potential for a favourable rental yield. Lower cost of investment Investing in a new home build allows buyers to save on the dutiable costs usually associated with buying a property. Stamp duty for a new home build (like with a house and land package) is often only payable on the cost of the land. There are also opportunities to claim tax deductions for a new investment property home build. Depending on the value and state of the newly built property, investors can claim depreciation on internal fixtures and fittings down the line, which result in cost savings. Opportunity for customisation A new home build presents a blank slate, giving investors more control and freedom over the type of property they want to have for investment. Considerations for investing in a new home build Time for construction and tenancy Building a new house will require a construction period before it can start to deliver returning value. Estimated timelines for new home builds are between 6-12 months, during which the investment will not “perform”. There’s also a consideration for the time it takes to find tenants to occupy the home after it has been completed. New home build investments in developing regions For investors looking to maximise the long-term value of their new home build with significant capital growth, regional and developing areas offer prime potential. New homes in developing communities feature lower initial costs that have a huge potential to grow along with the region. Take Townsville, North QLD for instance — since 2020, it has had a consistently low vacancy rate of under 1%, signalling a huge need for new homes. The Townsville Council has been actively pushing for the development of new housing, with over 2,000 additional lots being approved for residential development. Naturally, this presents investors with a unique opportunity to invest in a new home build in the rapidly expanding city.

What the QLD 7-Year Building Warranty Means for Buyers

The building process of a new home is a huge undertaking that involves months of work. Like with any construction work, the sheer number of factors involved in the building work can sometimes result in unexpected issues with the quality of the build, depending on who you work with. For those looking to buy or build a new home in QLD, the QBCC Home Warranty Scheme provides more reassurance by covering any potential issues that may arise with a newly built property. With 7 years of building warranty, buyers can have greater confidence in the quality and value of their newly purchased home. What is building warranty in QLD? The Queensland Building and Construction Commission Act (QBCC) Home Warranty Scheme was put in place by the QLD Government to protect homeowners from the risks of defective building work regarding their new home or building project. Under this building warranty scheme, any building work valued over $3,300 will be covered by home warranty insurance that is paid for by the builder. In the event of any defective work (defined as work that is unsatisfactory, flawed, subpar, and/or faulty) in the property, homeowners will be able to submit a claim to have the relevant issues addressed at no additional cost. In Queensland, building warranty covers new home builds for a period of 6 years, 6 months from the date when work according to a signed contract begins. However, claims for defective work must be lodged within a specific time period after the defect has been noticed. Claims regarding structural defects of the property must be lodged within 3 months of noticing the defect. Examples of structural defects include cracks or shifting in the structural elements of the building such as the foundation, walls, roofs, or support beams. Claims regarding non-structural defects of the property must be lodged within 7 months of the day the work is completed. Non-structural defects include issues such as cracked or peeling paint, improper seals on windows or doors, as well as plumbing and electrical issues. Benefits of building warranty QLD Building warranty offers huge advantages for individuals looking to buy a new home or build one: Financial coverage The substantial costs associated with buying or building a home often place a financial burden on buyers. The coverage of building warranty means that buyers will not have to worry about being liable for any additional expenses that may be incurred to resolve issues in the home — these costs will be covered during the 7-year building warranty period. This is especially important for structural issues, as the building work required to fix these issues can be extensive and expensive. Assurance of quality The building warranty provides buyers will more confidence in the quality of newly built homes as builders of the project will be required to adhere to the strict quality standards of the Queensland Building and Construction Commission. This also goes a long way in ensuring the value of the built homes against unexpected future issues. Legal protection Disputes between homeowners and builders regarding the quality of the home build are not uncommon. Building warranty helps to protect buyers by giving them an avenue to claim for repairs or rectification of defective work. It provides homeowners with legal and financial protection if the builder fails to meet the agreed standards or if major structural or non-structural defects arise. As award-winning home builders in Townsville, John Munro Builder is pleased to offer quality new home builds to future homeowners in QLD that are covered under the QBCC Home Warranty Scheme. With over 20 years of delivering beautiful and functional homes for the Townsville community, we are committed to helping you build the home of your dreams.

What Is a Good Energy Rating for a Home?

If you’re planning to build a new home, you’ll no doubt have come across home energy ratings as part of the planning process and wondered what a ‘good’ home energy rating means. With the recent update to Australia’s National Construction Code (NCC) requiring all newly built homes to meet the minimum requirement of a 7-star energy rating, it is important for those looking to build a home to be aware of what to include in their future property in terms of energy efficiency. So, what does it mean to have a good home energy rating, and how is it measured? Let’s dive into the specifics, from the building elements that contribute to a home energy rating, to the benefits of a ‘good’ rating. What is considered a ‘good’ energy rating for a home? All new home builds in Australia have to meet the required minimum 7-star energy rating as part of the nationwide initiative to increase the quality of future home builds. A ‘good’ home energy rating generally refers to a star rating of 7 to 10 on the Nationwide House Energy Rating Scheme (NatHERS) home energy rating scale. The star rating system provides potential homeowners and builders with a simple way to determine how energy-efficient the planned home build will be upon completion. This star rating system follows a consistent assessment standard that covers different types and sizes of home builds in various climates and regions across Australia. How are home energy ratings assessed? Home energy ratings reflect how much external heating or cooling appliances will be needed to keep the home at a comfortable temperature - the higher the home energy rating, the lower the need for artificial heating or cooling in the home. Home energy ratings are assessed through a systematic process: An accredited NatHERS assessor will be provided with the design, layout, building materials, and location. All of this data will be processed through specialised software that runs simulations to analyse the thermal performance under different climate conditions, especially those that are common to the proposed location. A star rating will be determined based on these results, with higher star ratings representing better energy efficiency and a more comfortable home environment. This rating will then be presented to the prospective homeowners as an accurate estimate of the home’s thermal performance. Building factors that improve energy ratings for a home The home’s energy rating can often be improved with the use of certain building elements and materials, including: High-quality insulation - insulating walls, roofs, and floors to reduce the transfer of heat to and from inside the home. Window glazing - using double or triple glazing, as well as low emissivity (low-E) glass. Shading - incorporating easings and awning to block excessive solar heat High thermal performance materials - including concrete, brick, stone, and tiles in building construction. Optimal home orientation - positioning the home to maximise natural light and heat from the sun. Natural ventilation - including windows, vents, and fans, as well as the layout of the home that promotes good airflow and consistent indoor air quality. Energy-efficient lighting - using LED lighting to minimise energy consumption. Benefits of achieving a good home energy rating Building an energy-efficient home with a good star energy star rating awards homeowners with a high-quality living environment that holds multiple benefits: Lower energy bills due to decreased reliance on heating and cooling appliances. A consistently comfortable living environment throughout the year, regardless of the season. Reduced greenhouse gas emissions, promoting environmental sustainability. As highly-awarded home builders in Townsville, John Munro Builder offers future homeowners a collection of home designs that all meet the required 7-star energy rating. We can work closely with you to include design features that enhance the energy efficiency of your future home.

How Long Does Building Approval Take in QLD?

In Queensland, almost all types of building projects will require building approval — including the construction of a brand-new home. Building approval is basically the go-ahead from your local council, based on your submitted plans. If you are planning to build a home in Townsville or Regional Queensland, you’ll need to factor in how long building approval can take, as well as engage a builder that can help you navigate the complex application process. Average Building Approval Duration For Townville As recently as 2023, building approval timeframes in Townsville have seen a significant reduction. 25 July 2023 saw the Townsville City Council report that the average decision timeframe across all new developments (commercial, residential, industrial) had been reduced to 21 business days. For aspiring home builders in Queensland, this presents good opportunity to obtain quick building approval to start building a new home in Townsville. Who Can Help with Building Approval in QLD? Building approval for residential projects are usually handled by the local government authority such as the council office. In Queensland, third-party building certifiers can also provide assessments and building approval, as well as advice on whether a building approval is needed, as some minor building work may not require an approval (i.e. accepted development). That being said, building certifiers are usually engaged for larger or more complex builds that have more non-standard inclusions When is Building Approval Needed? All types of buildings in Queensland must be assessed against the building assessments provisions – including Building Code of Australia (Volumes 1 & 2 of the National Construction Code), Queensland Development Code, as well as various other regulations. Building approval is required before the construction of any new residential, commercial, or industrial structure can commence, but also for certain forms of construction work to an existing property, such as: Extensions or renovations - Any significant alterations or expansions to the building, such as extending a living room area. Structural modifications - This includes any changes that impact the building's structural support, such as removing load-bearing walls. Change in building use – Changing the main function of a space, for example, turning a commercial office space into a residential home. Pools and fencing - Approvals focus on ensuring compliance with safety regulations, barrier requirements, and placement. Garage usage - Convert a garage into living space or using it for non-storage purposes. The Process for Getting Building Approval 1. Engage a Builder Work with a builder who can walk you through the process of getting approval. The benefit of having an experienced builder is that they’ve seen it all before, and can make sure that your plans and permits are up to scratch to get approved quickly. 2. Building Plans The builder may ask for additional details like property ownership documents or specific requirements for the home. There will be documents throughout the process that require signatures and authorisation for the application or approving changes. 3. Builder Submits Application Your builder will work to create the necessary building plans and documents for your project. Most builders already have existing home designs that are specifically built to meet building approval standards. Depending on the project complexity, builders will either liaise with a private building certifier or the local council's building department to submit the application on your behalf. You’ll be kept in the loop about the application's progress, as well as any potential delays or concerns that are raised about the building work. 4. Building Approval Received Once building approval has been granted, the builder will inform you and provide a copy of the official approval. Now, the construction can begin! At John Munro Builder, we are familiar with the required building codes and regulations in involved with the construction of both new home builds and renovations in Townville. We’ll work on your behalf to ensure that all of the project’s requirements are met for a smooth and quick building approval.

What the NCC Residential Efficiency Standards Mean for New Homes

Following a comprehensive review, the National Construction Code’s (NCC) standards were updated in 2022, resulting in a host of changes to the requirements for new home builds. Home builders who are looking to build in Queensland should take note of how these changes will affect the design and considerations of their future homes. The NCC’s Updated Requirements for New Home Builds The NCC’s updated requirements cover two main areas for the Modern Homes standards: Increased accessibility requirements mandate the inclusion of design features such as step-free entry and wider hallways and doors for increased safety and longevity. Raised minimum standard for home energy ratings under the Nationwide House Energy Rating Scheme (NatHERS). Newly constructed homes must achieve a minimum of 7 stars out of 10. The adoption of these new standards in Queensland will commence in two phases: Accessibility standards will apply from 1 October 2023 Energy efficiency standards will apply from 1 May 2024 What is Considered a 7-Star Energy Efficiency Rating? The standard of 7-star energy rating for new homes is set out by the Nationwide House Energy Rating Scheme (NatHERS), which aims to help homeowners build houses that are energy-efficient, comfortable, and sustainable. The higher the star rating of a home, the less energy will be required to keep the house at a comfortable temperature using external heating or cooling appliances. This could involve including design features in the home such as: Optimal orientation – Positioning the house build to maximise the amount of sun exposure for solar power, while allowing sufficient shade for the house. Double or triple glazing for windows – Opt for window glazing options that mitigate heat transfer in and out of the house. Increase zoning within the home – Include more doors to create separated spaces within the home to isolate heating and cooling for individual areas. Improved insulation – Extending insulation in the walls, floor, and ceiling. Installation of ceiling fans – Having fans in key parts of the home can provide more comfort and improve ventilation. Natural lighting alternatives – Replacing less efficient downlights with roof windows or skylights. The Impact of NCC Standards on a New Home Build While some may see the impact of the updated standards in terms of potentially higher costs, the changes also mean better benefits for home builders. The increased energy efficiency standards are especially applicable to the warm and wet tropical climate in regions like North Queensland. Lower household energy costs and consumption Building a home with higher energy efficiency will undoubtedly result in greater upfront costs, but this is offset by the significantly lower energy costs of the home over time. A naturally energy-efficient home will stay cool and comfortable all year round without the need for air-conditioning, lowering energy consumption and the cost of utility bills. Estimates based on the new energy efficiency requirements place cost savings on energy bills for new homes at an average of $183 every year. Environmentally sustainable Homes that consume less energy contribute to Australia’s goal of reducing the human impact on our precious environment. Building a sustainable home that lasts for generations gives homeowners peace of mind that they are doing their part for the environment. Year-round comfort Energy-efficient homes offer a comfortable living environment regardless of seasonality — staying at a pleasant temperature in every climate. In areas like Townsville where temperature can reach into the 40s, being able to relax in a cool home is a luxury that is well worth the investment. John Munro Builder offers quality new home builds in Townville that are designed in line with the NCC’s updated standards. If you are planning to build a home in Townville, get in touch with our team today to learn more about our residential building services.

What's the Best Material to Build a House With?

When deciding to build a home, most prospective homeowners spend an extensive amount of time on the building design and layout but tend to treat the choice of building material as an afterthought. Considering that the choice of building material can significantly impact the quality, durability, and energy rating of a home, it’s worth looking at the different materials available, as well as their suitability for different parts of the house. So, if you’re wondering which building material is best, read on as we explore the types of material for houses. Types of Building Materials The vast majority of homes in Australia are made from a pool of commonly used building materials such as wood and concrete. Here’s an overview of the different types of building materials for a house: Wood Wood and lumber have traditionally been the most popular choice of building material for a home. Its natural durability enables wood to be used in the structural elements of the home, such as support beams or framing. The natural texture and appearance also make timber suitable for decorative elements like flooring, cabinets, and other finishes around the home. As a cost-effective material that can be sustainability sourced, it’s easy to see why wood is such a popular choice for a building material. Brick Brick is most valued as a material for its sturdiness, longevity, and ability to withstand most weather conditions. Apart from these qualities, brick also offers a unique texture and aesthetic that makes it ideal in constructing accent walls, archways, and footpaths. Concrete Concrete is used widely in all types of building projects, primarily as construction foundation and slabs, but also increasingly as part of the house’s structure. More and more modern home designs include the use of concrete, such as for interior and exterior walls, staircases, and countertops. The strength and fire-resistant characteristics of concrete are what make it such a popular choice of building material, especially in spaces that see a lot of activity. Masonry block Masonry block is a building material that is used extensively in the construction of homes in tropical regions like North Queensland. While bearing some similarities to brick and concrete blocks, masonry blocks are much sturdier — enough to weather harsh storms and cyclonic conditions, especially when reinforced with steel. As a bonus, masonry block is also one of the most economical materials for building a home. Stone Stone has been used as a building material for centuries, and its usefulness in home construction has not diminished. As a durable and weather-resistant material, stone can be used in the foundational construction of a house to provide stability, as well as in structural parts of the home such as retaining walls and flooring. Steel Steel is used mainly in the structural portion of a home due to its high load-bearing capability. It is mostly used to reinforce other materials, such as in the case of steel beams and pillars within a property, especially one with a wide layout. Some builders use steel in a decorative fashion, but it’s not common. Factors Influencing the Best Material to Build a House The thing to note about the different types of building materials is that they offer varying levels of benefits depending on the type of house being built. Instead of looking for the overall “best” material to build a house, consider the following factors: Climate and weather Think about the typical climate and weather where the home will be built. When building in a region like North QLD, materials like hardwood will be less ideal as it tends to absorb moisture and warp in the warm humid weather. Similarly, building with heat-resistant materials can help to keep the home cool under the extreme heat of QLD’s weather, reducing the need for costly energy appliances like air conditioning. Material cost Some materials will invariably be more expensive than others, and it is possible for selected materials to end up being too costly for the planned budget. Checking with a builder on the estimated costs of desired building materials can help with making an informed decision. Aesthetic options Each material offers a different look and feel to the home, especially if it will be used decoratively. Many home builders take the unique aesthetic appeal of a material as a major deciding factor whether it will be used in the home build. Build Your Future Home With the Best Materials Deciding on the best material to build your dream home is easy if you know what you’re looking for. As Townsville’s leading team of home builders, we can help guide you through the process of selecting the best materials for your new home as well as all other parts of the construction process. View our available house and land packages in Townsville, or contact our friendly team to find out how we can help you!