Building from scratch or buying a finished house in Portugal: what is the most advantageous option in 2024?

Buying a ready-made house

In the real estate market, ready-made houses are offered in several options: new, from construction companies, and used. Let's consider the pros of buying a finished home:

• Clear understanding of the final cost of the house. Buying a finished home always has a fixed price - there is no risk of exceeding the planned budget. The average price per square meter in Lisbon is around 4,500 euros, and in the surrounding area, around 2,500 euros.
• Fast change. Regardless of whether the finished house is renovated or not, in any case, you will be able to live in it sooner than if you decide to start building your own house.
• Accurate valuation of the property. You buy a ready-made house, which means that you evaluate the architecture of the house live, not in an image; you study the house plan directly in the house, not on a piece of paper.
• Lower mortgage rates. If the purchase of the house is planned with the help of a mortgage loan, the rates for the purchase of a finished home are always lower than for the construction of a new one.
• Offers on the used real estate market. In the used real estate market, sometimes “hot offers” appear, that is, it is possible to buy a ready-made house at a price below the market - the so-called “urgent sale”. In the case of construction, there are no “urgent sales” and there cannot be.

However, there are many examples where a person, waiting for a “hot offer”, only waited for a new rise in property prices. Therefore, it is better to consider this point as an exception and not rely on it too much.

Now, let's analyze the main ones arguments against:

1. Quality and reliability of construction houses. Let's start with the finished house in the primary market, that is, from construction companies. In terms of quality and reliability, a finished builder's house is often unknown. One should always remember the logic of commercial activity: build cheaper - sell more expensive. Often, construction companies save on what they shouldn't save, especially on the foundation. For example, it is rare to find a construction company that performs geological studies before starting construction, and it is these studies that allow the structural engineer to determine the correct type of foundation. Hardly anyone does photographic documentation of the hidden works. Therefore, construction companies rarely give an extended warranty for their built homes.‍
2. Risks associated with used homes. If we consider houses ready in the used real estate market, that is, houses in which someone has already lived, to the risks mentioned in the first point is added the fact that you also buy the renovation of this house. Only you decide how well it was done and how much it suits you. The possibilities of carrying out any architectural or design projects, in this case, will be very limited. In addition, with the old house, you also buy the old facilities. In general, the main problem of buying used real estate is the presence of hidden defects. Dampness and mold in the basement, flaws in the premises, a leaking roof and many other “surprises” may await the new owner some time after the purchase. Unfortunately, it's not always possible to predict and verify these points before buying — sometimes dishonest sellers try to hide defects with a cosmetic reform.‍
3. Evaluation of the terrain. It should not be forgotten that ready-made houses are sold with land. It is necessary to evaluate not only the house, but also many factors related to the terrain: plot size, location and infrastructure, ground cover, relief, and much more.‍
4. Lack of participation in design.

Another important point is that when buying a ready-made house, you do not participate in any way in the formation of the architectural appearance of the house and its plan, in the choice of building materials. You can only evaluate the house already built by someone else. All decisions were made without taking your opinion into account. It should be noted that ready-made houses in the mass segment are rarely unique and, most often, are built on the basis of standard projects that do not follow modern architectural trends.

1. Higher costs. Ready-made houses, for the most part, cost more than building a similar house from scratch.‍
2. Difficulty in reselling. In addition, it should be understood that if you buy a ready-made house and after a while decide to sell it, it will be difficult to do this on terms that are advantageous for you. It's like a car, which is sold for the second, third time, etc.‍
3. Additional expenses. In the budget for buying a home, it will probably be necessary to include additional expenses for the services of real estate agents.

Building your own house: low cost option

Building your own home, especially in a low-cost format, may be a more advantageous option.

What are low-cost houses?

Low-cost houses are homes built using economic technologies and materials, which make it possible to significantly reduce the cost of construction. This does not mean that such houses will be of lower quality or comfort. Thanks to modern construction technologies, it is possible to create reliable and energy efficient housing at an affordable price.

Here are five well-founded reasons why building low-cost houses in Portugal can be an advantageous choice:

Savings on initial costs

Low-cost homes are generally cheaper to build compared to traditional homes. In Lisbon and Setúbal, the construction of low-cost houses in 2024 costs around 1,200 euros per square meter. Cost reduction is achieved by using cheaper but effective building materials, such as cellular concrete blocks, aerated concrete, or modular constructions. These materials provide good thermal insulation and resistance at lower costs.

Economical houses, especially modular and prefab buildings, can be built significantly faster. While traditional construction can take 12 to 18 months, modular homes can be completed in 6-10 months, including land preparation and installation. This is because modular houses are assembled from prefabricated parts, which are delivered to the construction site. This reduces construction time, which in turn allows you to save on the budget and start using the house faster.

Energy efficiency and low operating costs

Low-cost homes are often designed with a focus on energy efficiency. For example, houses built with modern insulated panels with good insulation can significantly reduce heating and cooling costs. In Portugal's climate zone, where summer can be very hot and winter moderately cold, high energy efficiency can lead to significant savings in the long term. Homes equipped with energy efficient windows, a ventilation system and good thermal insulation help to save on subsequent heating and cooling costs.

Simplicity and minimalism in design

Low-cost homes are often designed with a simple design and minimal finishes, which helps to reduce costs. Simplified architectural solutions and minimalist design not only reduce construction costs, but also ensure easier maintenance. This is especially important for homeowners who want to avoid costs with complex and expensive finishing work.

Sustainability and environmental advantages

Many affordable homes are built with environmentally friendly materials. For example, using recycled materials or wood from certified sources helps reduce the carbon footprint. These homes not only reduce their environmental impact, but they can also be more efficient in the long term, reducing the impact on the ecosystem.

Conclusions

The choice between buying a finished home and building your own is a matter of personal preferences and budget. A finished home may offer convenience and quick occupancy, but it often costs more and limits customization possibilities. Building your own home, especially in the low-cost format, offers more flexibility to adapt to your needs, preferences and budget, but requires more time and effort in the construction process.

In 2024, low-cost housing construction in Portugal is becoming an increasingly popular choice thanks to the availability of modern construction technologies and materials. It's important to weigh all the pros and cons carefully to make the ideal decision that meets your needs and possibilities.

The company New House in Setúbal offers house construction services, including low-cost options. Our team is comprised of experienced masters, architects, and engineers who will assist you at every stage of the process — from design to completion of construction. We are ready to turn your dream of owning your own home into reality, taking into account all your preferences and budget possibilities. Contact us and we will do our best to make your new home the ideal place to live!