What to look out for when buying land or a house and land package

10 mins
Updated
October 4, 2024

Buying vacant land or a house and land package offers an exciting opportunity to design and build a home tailored to your needs. However, there are many important factors to consider before making your decision. Whether starting from scratch with raw land or opting for a package deal with a developer, being well-informed is crucial to avoiding costly surprises. Additionally, if you plan to build on the land you've purchased, understanding the steps involved and potential challenges is essential.

What to consider when buying land

Purchasing vacant land provides the ultimate flexibility, allowing you to build the home of your dreams from the ground up. However, there are several crucial factors to assess before buying:

  • Zoning regulations: The zoning of the land determines what you can and can’t build. Always check with the local council to ensure that the land is zoned for residential use, and find out if there are any overlays or restrictions such as heritage protections or environmental conservation rules that could limit what you can build or require additional permits.
  • Land shape and slope: The shape and slope of the land can have a significant impact on the design and cost of building. A flat, rectangular block is often easier and cheaper to build on, while sloped land may require expensive earthworks, retaining walls, or specialised designs to accommodate the incline. Irregularly shaped lots can also limit the available space for construction, requiring more creative designs or adjustments to fit the building footprint.
  • Terrain and clearing needs: Consider the current condition of the terrain — does the land need significant clearing before building? If there are large trees, rocks, or uneven surfaces, you’ll need to factor in the cost of clearing the land. In some cases, there may be restrictions on removing trees due to environmental protections, so check with local authorities before making plans.
  • Utility services availability: Ensure the land has access to essential utility services, including water, electricity, gas, sewerage, and internet/phone lines. In rural or undeveloped areas, these services may not be readily available, meaning you’ll need to budget for installing them or alternative solutions like septic tanks, water tanks, or off-grid power systems. In some cases, extending utilities to a property can be costly and time-consuming, so it’s critical to confirm what’s available before purchasing.
  • Soil quality: The soil condition of the land is another key factor. Different types of soil (such as clay, sand, or loam) affect the cost and complexity of building. A soil test can reveal whether the land requires specialised foundations due to poor soil quality or unstable conditions. If the soil is prone to shifting or erosion, this can increase the building costs, as you may need to stabilize the ground before construction.
  • Orientation and sunlight: The orientation of the land refers to how the block is positioned in relation to the sun. Ideally, a home should be oriented to maximize natural light and energy efficiency. In Australia, north-facing homes are typically preferred as they receive more sunlight during the day, reducing heating costs in winter. Proper orientation also helps with cross-ventilation and maintaining a comfortable indoor climate year-round. When evaluating land, consider how the block’s orientation will affect the design and positioning of your future home.

What to consider when building on purchased land

If you’re planning to build your own home on a purchased block of land, there are several steps and considerations to keep in mind:

  • Choosing the right builder: Finding a reliable builder is crucial to the success of your project. Look for a builder with experience in constructing homes in your area, as they will be familiar with local regulations, soil conditions, and terrain. Always check references, visit previous projects, and make sure the builder is licensed and insured.
  • Custom design or off-the-shelf plans: Decide whether you want a custom-designed home or to use an off-the-shelf plan provided by the builder. Custom designs allow you to create a home tailored to your exact needs, but they can be more expensive and time-consuming. Off-the-shelf plans are generally more affordable and quicker to implement, though you may have limited options for customisation.
  • Budget and cost estimates: Building a home can be more expensive than anticipated, so it’s important to set a realistic budget and factor in extra costs for unforeseen expenses. Include items such as site preparation, permits, landscaping, driveways, and utilities in your cost estimates. Always allow for a buffer in your budget to accommodate unexpected costs during construction.
  • Permits and approvals: Before building, you’ll need to obtain the necessary building permits from your local council. This includes approval of the house design, site plans, and any other required documentation. Ensure that your builder handles this process, as delays in permits can significantly affect your construction timeline.
  • Construction timeline: Agree on a timeline with your builder, including clear milestones for each stage of the construction process. Regular communication with your builder will help you stay on top of the progress and address any issues as they arise. Be prepared for potential delays, especially due to weather or material shortages.
  • Site and soil preparation: Before construction begins, the land will need to be cleared and prepared. This may involve levelling, removing trees or rocks, and preparing the foundation. Soil quality and drainage should also be addressed, as poor soil can lead to foundation problems in the future. A qualified engineer should assess the site and ensure it is ready for construction.
  • Energy efficiency and sustainability: Consider incorporating energy-efficient features into your home design. This could include solar panels, rainwater tanks, double-glazed windows, and insulation to reduce energy consumption and lower your bills. Sustainable design principles, such as passive solar orientation and natural ventilation, can make your home more comfortable and environmentally friendly.

What to consider when buying a house and land package

A house and land package combines a block of land with a newly built home, offering convenience and often lower costs compared to purchasing land and organizing a custom build separately. However, buying a house and land package also comes with its own set of considerations:

  • Developer reputation:  Before committing to a house and land package, thoroughly research the developer and builder involved. Look for reviews from past buyers, visit other developments they have completed, and assess the overall quality of their work. A reputable developer will be transparent about the timeline, costs, and inclusions, and should be able to show examples of their work. It’s also wise to check whether the developer offers a fixed-price contract, which locks in your total cost upfront and protects you from unexpected price increases due to delays or rising material costs.
  • Inclusions and exclusions: One of the most important things to understand when buying a house and land package is what is included in the price. Standard inclusions often cover the home’s structure and basic fixtures, but many packages may leave out key elements such as driveways, landscaping, fencing, or window coverings. It’s important to clarify whether the package includes these elements or if they are considered upgrades that come at an extra cost. In some cases, the builder may offer a choice of materials, finishes, or design options within the base package. However, upgrades to higher-quality materials or additional features (such as better kitchen appliances, premium flooring, or luxury fittings) can significantly increase the total price.
  • Flexibility in design: House and land packages often offer set designs that may limit your flexibility in customising the home to your preferences. Some builders offer limited customisation options within the package, allowing you to modify room sizes, layouts, or finishes. However, substantial design changes may not be possible unless you opt for a more premium package or work with a different builder.
  • Build timeline and delays: Understand the expected build timeline for your house and land package. Construction can take several months, and delays are not uncommon, especially due to factors like weather or material shortages. Confirm with the developer when they expect the home to be completed and whether there are any penalties in place if the build is delayed. It’s also essential to ensure that the land is titled and ready for construction. In some cases, land in a house and land package may not yet be registered, which can delay the start of the building process.

Whether you’re buying vacant land, a house and land package, or planning to build your dream home on a purchased block, careful planning and due diligence are essential. When purchasing land, evaluate key factors such as zoning, land shape, utilities, and soil quality. For house and land packages, understand the inclusions, developer reputation, and build timeline. If you plan to build on purchased land, ensure you work with a reliable builder and factor in all the necessary steps, from permits to site preparation and sustainability features. By considering all these elements, you’ll be well-equipped to make informed decisions and successfully create your ideal home.

Disclaimer
Prepared by Beck McLean Finance Pty Ltd ABN 80 632 809 833. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.