Monday, October 20, 2008

To build, or not to build?

In the midst of a global recession, the current real estate turmoil and wall street breakdown in the US, we recently came face to face with a very, very tough decision.

To build, or not to build - our first home, now, at the time of crisis - that is the question.

Perhaps it will be safer to wait. We have only been here in Australia for 10 months, after all. Perhaps we're rushing things. We could stay renting for 1 or 2 more years, like most migrants who were here before us did, before we even think about buying our first home.


I could end the story right here, and leave you all hanging with the same question that bugged us for days. Do we, or do we not proceed? Those of you who have known me for years probably know the answer already.

Yes we did. And though I have established a reputation among family members and friends as a risk-taker, this, as the way things are currently turning out to be, is a risk I'll probably look back a couple of years from now and say, "Boy, am I glad I took it". I'll tell you why later.

So, on a lovely spring day some 3 weeks ago, I went to see my agent and we pushed pen on paper. It didn't made as much as an effect until 30 minutes after, when he shook my hand and said "Congratulations". That's when it hit me. Damn. I just signed the contract of sale of my very first land.

Creek at Ridgewater Village

The land we bought is 448 square metres (not bad for a first home), and is located in Ridgewater, a new village inside the same suburb we are currently in, at Caroline Springs. It sits on top of a rolling hill overlooking plush greenery and a nearby creek (years of writing ads for real estate companies sure came in handy). It's the most picturesque place in the estate (as the brochure says) and is also walking distance to the town centre, 3 schools, 2 inddor pools, 4 tennis courts, 10 basketball courts, 2 football fields, 5 cafes (including gloria jean's), a skate park, a barbecue park, a huge gym, the medical clinic, the police HQ, a massive lake, and yes, the state-of-the-art library.

The house we've chosen to build is composed of 3 bedrooms,
2 bathrooms and an ensuite,
a study, double garage, and an outdoor living area or alfresco. Again, not bad for a first home. Building won't start until March of next year though, since the land won't be ready until then.

But then again, you might still ask, why? Why would I look back, a couple of years from now,
and say, "Boy, am I glad I took that risk?" Why is it a good time to build now, considering the world's economy is falling apart?

My wife was asking me the same question. And all I can tell her was wait. Now being a banker has some advantages, and one of these is being able to read financial trends way ahead of others. True enough, a couple of weeks after we signed the contract, home loan interest rates in Australia plunged for the first time in 3 years. Economists predict rates will hit an all-time low by the first quarter of next year (same time we're already building). Not only that, the federal government has also increased the First Homeowner's Grant (money given by the government for, well, first-time home buyers) from $14,000 to $26,000! Which is enough to offset the 7% deposit we're paying for the house and land!

Here are some photos I took of the display home. The house we're about to build will look exactly the same, except for the furniture (of course), and the oven since I've upgraded into a larger, freestanding one and a canopy range hood. The facade will also be different since we're putting some bricks on it. Pardon the excitement. But if you're 32 year old and married with kids, and spent the last 31 years of your life living with your parents or by their means, you'll know exactly why I am so thrilled.

Just click on the photos to enlarge