The Entertainer

“Just the thing for Entertainment” or something similar is a common theme in house builder’s brochures and estate agent descriptions.

It’s really a way of trying to upsize you into a bigger (more expensive) house.

Before you get sucked in with these statements for your new house here are a few questions you need to ask yourself:

  • How often do you actually “Entertain”?
    • Every week?
    • Once a month?
    •  Or hardly ever?
  • Will you be trying to impress. . . . or just aiming to have a good time?
  • How many is it really going to be?
    • Is it going to be one or two couples around for brunch or dinner or;
    • A party for 30 or 40 people?
  • Is a barby your normal way of entertaining? It is for most Australians. . . . .In that case you are more likely to need plenty of outdoor areas, which probably include plenty of space for children to run around. . . . .Not easy if you have filled your block up with a house that has big rooms for “Entertainers”.
  • For family occasions most people won’t mind if the garage is pressed into service for a meal if it is presentable. If it isn’t perhaps you can just cover the front of the shelves with some fabric.
  • Think back to the parties you went to that you really enjoyed. Some of the better ones that I went to were in small houses and flats. . .  you would normally find me, along with half of the other people there, packed into a tiny kitchen.

Alternatives for Entertaining

When our children were young we used to live in small houses so when it came to birthday parties we used to hire a village, or community hall.

You can normally hire a big room including a kitchen for half a day at very reasonable rates.

That meant lots of room for kids to run around and play games.

You don’t need good weather.

Just put paper tablecloths on the provided trestle tables, afterwards roll it up with the paper plates and plastic cutlery and in the bin.

No worry about damaging your carpet, just brush the floor and mop any spills and go home.


What are some of the parties you have enjoyed and what was the place were you held them?


Budget has more posts about finding a house the right size for you


Fixed Price Contracts

Having a ‘Fixed Price Contract’ doesn’t mean the bottom line price of the contract will stay the same.

All it means is that the majority of prices for individual work items are fixed.

Here are reasons for changes in the final price:

  • Planning and Building Approvals Some blocks will have requirements placed on them that may only be determined after  the plans are submitted; for example Bush Fire Prevention.
  • Site Works Sometimes the excavation of the foundations can reveal worse ground conditions than the three small test holes indicate. Normally the price is only fixed if the site investigations results are representative of the whole foundation.
  • Increases in Taxes or Charges Not a lot that you can do if the Government or Council changes the tax rules or scale of fees.
  • Variations on Building Works The contract prices are only fixed for the agreed drawings and specification, start changing things and prices can rise quickly!
  • Prime Cost Items and Provisional Sums Adjustment See the following links Prime Costs and Provisional Sums.


Also see Final Cost




Investment Property or New Home

Guest post by Callum Scott of Scott Finance

Are you building for yourself? . . . or will it be a rental property?

Over the last part of the 20th century home ownership has been around 70% but has now slipped to 67.5%.

Why has this happened and will this trend continue?

Is it an affordability issue?

Mortgage Choice’s ‘Future First Home Buyer Survey’ found that nearly 32% of renters polled said that they would continue renting longer to save for a deposit.

A study by the Australian Housing and Urban Research Institute (AHURI) found that over the last 20 years the number of ‘Long Term Renters’ (more than 10 years) renters has increased from 27% to 33.4%.

ABS, Housing Occupancy and Costs 2011-12 shows that on average,  tenants spend 20% of their gross income on housing. After income tax and living expenses, this does not leave a lot to put towards a housing deposit.

Although house building prices seem to be competitive will land prices continue to rise?

Unless salaries keep up,  it all becomes tougher.

Perhaps with mortgage interest rates at a historic low and with lenders fiercely competitive in the deals they are currently offering. This may be the time to make a move to build a new investment property? . . . . . Just make sure you have done the calculations so you can deal with future rate rises!

For no cost advice about new house finance contact: Scott Finance


Love the Display Home


When you visit a Builders Display home you will probably be given a price list which quotes the Basic Price for the house you are looking at.

Don’t be fooled!……… The feature you see in the Display Home will add much more to the cost.

The following table provides examples of the value of upgrades added to Display Homes around Melbourne.



Base Price

As Displayed

Percentage Increase


Prescott 1900




Carlisle Homes

Illuka 25




Dennis Family Homes

Hastings 241




Hallbury Homes

Vogue 39





Delta 22




Porter Davies Homes

Montague 21





Villa Vitoria




All figures as published in the Melbourne Herald Sun 17 August 2013

You can see figures for 2017/18 prices here: Display Home Upgrades

Additional Costs

In addition to the displayed costs you might have to pay extra for:

To get some idea about how the costs can add up follow this link: What Will It Cost.

Also see


Living While you Build – Cost

Living costs during the time your new house build can be much more expensive than after you have moved in. Its well worth planning for the additional expense.

Why is it expensive?

Well you will have either a mortgage or rent on where you live now, You will also be paying the mortgage on your new block, plus the mortgage on the stage payments on the house construction.

In the last couple of months of build you could be paying close to twice the monthly cost of the final mortgage. If the build is delayed things can really go pear shaped with regard to debt.

There is the opportunity in a standard building contract to have a liquidated damages amount which can help control the risk. In our last building contract this was set at $250/week (which would pay the rent on the place we were living in) if the build took over a year.

If you are unmarried and still living at home, or can move back with family for the time of the build, that can really help. For the rest of us its a case of making sure that we budget for the additional costs and putting some cash aside.

It’s worth remembering that if you have selected the right size of house you should be able to afford more than the basic mortgage on your new house so that you can stand possible future interest rate rises.

Just make sure that when you move the credit card isn’t maxed out. There are usually lots of costs up after the move such as blinds, curtains, additional furniture and gardens. All things needed, to finish off your house.

If you think all this as a major obstacle, then perhaps building isn’t the way to go. Buying an established house or finding a house/land deal with a standard real estate contract deal of 10% deposit and the balance at settlement may be better options.

For more posts about decisions like this see Starting Off


What Will It Cost?

When you are setting your budget for a new house, it’s not only the cost of the house and land, but all the other things that you might not have thought about.

If you haven’t considered these you might find that as well as a big mortgage your credit cards are all maxed out.

Here are some of the things you will need to consider based on Melbourne Outer Metro prices (say 35-40 km from CBD) in late 2010.

The costs are based on a small house with the builders basic fit out, say 15 square (140m2):


Cost of land $150,000 PLUS

Stamp duty say $5,000 PLUS

Legal fees say 2% $3,000



Basic cost of building say $150,000

Building cost are in the range $6,000 to $8,500 a square. Smaller houses have higher costs per square with cost per square reducing as the house gets bigger.

Site Cost say  5%  $7500

Excavation to level the site (See this link: Steeper Sites) and/or additional foundations (See this link: Poor Ground ) and costs can quadruple.

Extras say 5% $6,500 plus

Can includes extra electrical fittings, washing line, garden paths. If you want premium kitchen and bathroom units it could be $50,000 or more. (see this link: Love the Display Home)

Legal fees say 2% $3,000

Fence say $2,000

Light fittings, picture hooks, curtains, blinds and other bits and pieces say $5,000

Garden say $10,000 plus

Additional Furniture say $5,000 plus

Removal say $1,000



Land and House $348,000 plus

Remember even if you get a house and land package for $300,000 you will need to allow for at least another $40,000 before you have finished.

A big cost is the land. This cost will drop as you go further from the city.

When I first bought a house the rule was you could only borrow two and a half times your annual salary! If you were to go back to that rule the only way to go in the future would be to fit houses on smaller blocks.


Just Starting Off . . .  Check out the: anewhouse Guides

For similar posts see Starting Off