Should You Buy Or Build Your House? | Inquirer Technology

Should You Buy Or Build Your House?

/ 07:54 AM September 09, 2022

Owning a home is a dream for many people across the world. However, it involves careful planning based on one’s budget and preferences. One of the most important questions you have to consider is whether or not you should buy or build a house. 

Both decisions have pros and cons, and you will have to deal with them for months, if not years. More importantly, the wrong choice could become a massive waste of time and money.


This article will discuss the many benefits and risks of buying and building a house. Consequently, you can choose the right path to your new humble abode.

Advantages of buying a home

This is a house.

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The most significant upside to purchasing a house is that you can immediately relocate. That is why real estate agents refer to this type of property as RFO or Ready for Occupancy. 


You will not have to wait for construction to finish. As a result, you do not need to work with contractors or inspect the site yourself. Moreover, you work with a specified price.

Building a home also requires a specific budget. However, that could eventually grow as you build and furnish its rooms. Construction materials may fluctuate in value due to various global factors.

You may save money.

This represents the budget needed to buy or build a house.

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According to the Philippine Statistics Authority, lumber prices in the Philippines rose from 6.9% to 8.3% as construction projects resumed in Metro Manila. Aside from higher demand, global supply chains further increase costs.

On the other hand, existing homes have specified asking prices. You may even negotiate with the owner or broker to reduce costs. Note that haggling could become more challenging as housing demand rises.

For example, US property prices increased during the global pandemic. In response, people started bidding wars even for the smallest properties.

Buying a house may involve a few minor renovations. For example, you may paint your new home a different color or repair door hinges. Still, they cost less than building a house from the ground up. 

Buying a home could make it a better investment.

This is a house.

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Purchasing a new home makes it more viable as an investment. It requires minimal spending, so you could potentially earn more if property prices increase.


You could try flipping houses by purchasing them at low prices and then selling them later for much higher. On the other hand, you could turn them into rental properties.

Many investors see real estate as a reliable investment because people will always need a place to live. As a result, you are more likely to find buyers for residential properties.

Note that you should consider current market conditions before investing. For example, the Bangko Sentral ng Pilipinas (BSP) rose interest rates to 3.75%.

This decision increases a homeowner’s monthly mortgage payment and interest rates for home loans. As a result, the real estate firm Cushman and Wakefield Philippines said this could dampen housing demand for 2022. 

In other words, you might struggle to find buyers for your new home. If you are not ready for these conditions, you might want to focus on securing a house as a shelter, not an investment.

Disadvantages of buying a home

These are house keys.

You could save money by purchasing a house, but you will have to face high upfront costs. According to Statista, the lowest average home price in Q1 2022 was ₱146,350 per square meter.

Meanwhile, the Bay Area of Metro Manila had the highest selling price at roughly ₱286,030 per square meter. You will have to prepare millions of pesos for the initial purchase.

You could lower costs by looking for properties outside Metro Manila. Still, you will need to prepare a considerable sum of money as rising interest rates and other factors boost prices.

You have limited options.

These are houses.

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Homebuyers consider numerous factors when choosing their new house, not just their budget. For example, you might want a neighborhood close to your office or your children’s school.

You will also need a house that could fit your entire family. Unfortunately, finding properties that match all your preferences is not easy. Often, you will have to settle for homes that provide most of your requirements.

You could renovate your house to fit your needs, but that would require more time and money. Take all the time you need when inspecting a place to see if it suits you.

You will have to compete with other home buyers.

These are people buying a house.

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This article discussed housing demand because it has a significant impact on prices. Simply put, houses become more expensive as more people want to buy them.

Homebuyers want the current owner to choose them as the new owner. They usually try to convince the person by offering to buy at higher prices.

The home’s value rises as more people use this method. As a result, you may have to extend your budget or look for other homes. Current BSP interest rates and inflation have reduced housing demand and increased house prices.

You might have to pay for repairs.

This is someone fixing their house.

We have discussed that you should closely inspect a house before buying to avoid potential issues. Still, you may encounter some problems after your purchase. 

For example, you might see the ceilings leak during a rainy day, even if they looked secure before your purchase. Such issues would require additional spending for repairs.

On the other hand, you might settle a property with a few faults because of its low price. However, you may find more issues than expected after you buy or build a house.

Advantages of building a house

This is a house.

Let us talk about the benefits of building your home. The most significant advantage is that you can design the property however you like. You will not have the limits of an existing house.

That means you could set any location for your new humble abode. If your budget allows, you could pick an empty lot near a beachfront or mountain. Then, you could build a two-story home with a spacious backyard for your kids. 

You are also in charge of how energy-efficient your home will be. For example, you could design a home that uses solar panels so that it can store backup power for emergencies. 

The total freedom of building a home allows you to set costs and maximize your budget. As a result, you could reduce the chances of additional repairs or renovations.

You will not have to worry about competing homebuyers, so you can take all the time you need to build your dream home. What’s not to like with more freedom and less competition?

Disadvantages of building a house

This is someone having trouble with house construction.

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The total freedom of constructing a new home comes with more stress. You will have to work with various contractors to build the house. However, you cannot simply wait for them to finish.

You must oversee every part of construction to ensure workers follow your requirements. Also, you should check if your plan works as intended in real life.

For example, let us say you wanted cupboards for your kitchen. If you do not check their placement, you might move into a house with misaligned cabinets.

You will have to speak with every worker for each part of your home. Moreover, you must discuss the right tools and materials needed to stay within your budget.

Buying or building your house from scratch does not prevent unexpected costs. Planning every part of the construction yourself merely reduces the chances of getting them.

As mentioned before, the prices of construction materials fluctuate. Also, you may struggle to find your preferred materials because of global supply chain disruptions.

More importantly, you will have to wait for several months or a year to relocate. If you need to move to another home immediately, it might be better to buy instead of build. 

Final thoughts

You may check other online resources if you are still deciding whether to buy or build your house. Also, you may ask your friends and family for suggestions.

More importantly, you should speak to a real estate agent. These professionals can guide you through the essential steps of purchasing and building a new home. 

Real estate brokers could show you the best deals for houses that suit your needs. Also, consult a financial advisor if you intend to buy or build a house for your portfolio. Note that this article does not provide investment advice.

Frequently asked questions

Is building a new home a good investment?

Some people use real estate to earn more money. However, you should speak to a financial advisor if you want to buy or build a house as an investment.

What are the disadvantages of building a house?

Expect more stress when building a home from the ground up. You would often communicate with several contractors and routinely inspect the project.

Is buying a house worth it?

Buying a house might be ideal if you want to relocate as soon as possible. However, it may not be the best choice if you want a home that fits all your preferences.

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TOPICS: investment, Real estate
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