If you’ve been reading Homeiown for a while, you know I don’t usually do the news here - simply because it doesn’t make any sense to re-publish stuff other websites are full of. This time, when they announced the third successive interest rate cut, I made an exception, because I want to explain what it means to the home buyers and the home owners.

If you have no idea what interest rate is, read this paragraph, but if you do - skip and go to the next one. Interest rate is the percentage rate paid on your bank savings account, it is also the percentage rate charged on a loan - such as mortgage. The way things work is that Federal Reserve Bank sets the global interest rate nation-wide and then each bank changes their rates according to the global interest rate. For example, if the global rate moves up - the earnings on your savings account will probably increase, but if you are paying a mortgage at variable rate - you will also start paying more.

Let’s get one thing straight - First Home Owners Grant didn’t triple. The media got many people thinking that it did, but if you’re going to let this buzz pressure you into buying a house sooner - better get your facts straight.

Here is what happened: from 14th of October 2008 and till 30 of June 2009 the FHOG (First Home Owners Grant) goes up. People buying their first established home now get extra $7000 (on top of previously offered $7000 FHOG plus 3000 First Home Owner Bonus). So together it makes $17000 instead of $10000, which means that it didn’t even double. Another thing to notice is that the Bonus is only given on purchase of house that doesn’t exceed $500,000

Before I started looking into demolishing a house, I didn’t realize all the costs that were involved. The only information I could find online was this article in realestate.com.au that explains in general about house demolition.

It was quite a shock to find out about all of the things involved. I was expecting to pay for an excavator to do the demolishing and for a truck to remove the rubbish, but not all of the other stuff – permits, insurances, safety barriers, traffic control, etc. It gets more expensive if the house contains asbestos or if the foundations of the house are massive concrete slab. Apparently demolition requires an approval (which naturally comes with a fee) and a council permit (another fee).

Overall, you can expect to pay anything between 5,000 and 10,000$.

Speaking of concrete houses, I was under impression that ZEGO offers a unique solution - but actually that they have many competitors.

All of them offer ICF – insulated concrete forms – as a building system. Here’s the list of the first ones I found:

Thermacell

I have found another option that falls somewhere in-between building your own house and choosing a pre-fabricated one. On the one hand you can design the house any way you like, and on the other hand you can still build it quickly as if it was pre-made and only had to be assembled. As the matter of fact it looks a lot like LEGO.

This option is offered by ZEGO, they offer hollow foam blocks that you use to build the “shell” of your house and then fill those with concrete. Their website has a video that explains everything in a really fun and easy manner (click here to watch). It says that one level of a house can be built in one week. They even lay out a costs comparison table, have a look. According to that table, ZEGO wall is the cheapest (100$ for square meter) compared to brick veneer (111$), double brick (169$) or concrete block (142$).

Besides the advantage of quick construction they also mention that the house becomes more energy efficient (because it is better insulated) and consequently home owners saves on heating and cooling costs (up to 80%!). Plumbing and electrical works are made easier because of the form blocks (no need to drill in concrete) and the house is 4 time stronger than traditional house.

If you are on a tightest budget and even building your own house is too much for your pocket, there is another way. You can buy a block of land and relocate someone else’s house – how’s that for an idea?

The advantages are obvious – it’s cheaper than building a new house (you can save up to 50%), it’s faster – removal can be finished within a couple of weeks, and often the quality is better because many of the older houses were built using higher quality materials than those used today.

Apparently there are many people who sell the houses they own for removals - to avoid paying demolishing costs. I saw several houses for sale in the Trading post (http://www.tradingpost.com.au) for $1000 – $2000, plus the removal of a house costs, about $30000 - $35000. The way it is done, you hire a removal company and they handle everything – remove the roof, cut the house in sections of transportable size and then move the house to your site where they install and re-join it, as well as put a new roof over it.

The housing affordability (which is really closed to none these days) got me thinking – there must be a way out. So I can not afford to buy a reasonably sized house in the inner city suburbs, but does it mean that I am doomed to renting?

At first I was thinking – what if I buy a block of land and build my own house? This way I can save the money that otherwise would have been the builder’s profit. But then – I don’t know the first thing about building a house and what’s involved. How much would that cost, what kind of permits do I need to get, who will draw my plans, where to start? So I was searching for answers and found some useful info.

At first, I wanted to see how much I will save if I build myself. So I have found this building costs calculator.Use it - and get an idea how much your dream home will cost you. Don’t miss the assumptions they base the calculation on (listed under “Assumptions”).