There are two types of house and land packages. The first option is to buy the land and then build the house on it. The second is to buy a house and land package where the house is already built on the developer’s land and ready to move in, also known as a spec home. These properties are usually situated in land estates, where property developers purchase land released by the government and set up infrastructure and facilities to create a new community. This also gives you the freedom to choose both a property and house design that suits your budget and requirements.

 

Benefits

There are many clear benefits to buying a house and land package rather than organising the purchase of land and the construction of a house yourself. These include:

  • You will save thousands of dollars. You will only have to pay stamp duty on the land’s value as the house has yet to be built. Financial organisations or lenders should be able to waive some of the fees for both of the described situations above.
  • Clear upfront price. An important consideration for buyers whose finance is pre-approved and may be on a tight budget.
  • Saving time. It takes a long time to design your own home, select inclusions, colours, fittings and fixtures. With a house and land package, you’re saving yourself a lot of time.
  • Simplified process. The house plan is already intended to suit the block when taking sun orientation and driveway placement into consideration.
  • Easier process. The builder can simplify the contract process by either waiting for you to settle the land, then conduct soil and survey tests so they can determine site costs and finalise the contract, or the builder can fix the site costs to produce the building contract around the same time the land contract is ready. This is more efficient as the lender can obtain finance for both the house and land at the same time.

 

Things to Consider

  • Small lot sizes. Many house and land packages are featured on small lots. Take a look at your budget and decide if you’d like a bigger lot, because there most likely are other available lots by the developer. Make sure the block of land will meet your requirements in the future as well, especially if you intend on starting a family.
  • Location. Newer estates are usually situated in the outer suburban areas, away from the CBD. Vacant lots in the city fringe suburbs are very expensive compared to suburban areas, which means you’ll usually find it a lot cheaper to buy and existing property in the majority of outer suburban areas. This can cause a problem as employment opportunities and public transport is usually limited in outer suburbs, which means you’ll need to consider how long your commute to work each day will be, including traffic.
  • Lower yield. If your house and land package is located in a new estate, selling for profit might be difficult. This is because the value of a home in suburban areas usually rise at a slower pace due to weaker economic drivers and lack of infrastructure. Capital growth is even harder to come by as developers offer new homes at competitive prices.

Take your now and future lifestyle attributes into consideration and weigh up the pros and cons of choosing a house and land package over taking the time to design your own home. If you think a package would suit your needs best, the next step for you is to compare house designs in an estate you like and choose a reputable builder.