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For many homeowners and investors in Victoria, choosing whether to buy land and build, or buy an existing home is an important decision. It’s also one that could have a significant impact on their lifestyle and their wallet.
For many, the decision to buy a block of land and build your perfect home is a no-brainer. You’ll end up with a house that matches your needs, budget and lifestyle, instead of an established home that might not fit your requirements exactly. With land purchases, you can choose to design and build a home of your own design, or select a house-and-land package off the plan.
The question of affordability.
Buying land in a new estate is often a more affordable option than buying a smaller established house closer to the city, as new estates tend to be built further out of town where land is cheaper. There are also government incentives for new homebuyers in Victoria and if you’re buying a house-and-land package as a first-home buyer you may be eligible.
To qualify for the grant, the price of the property or construction of the home must not exceed $750,000 in Victoria and you must live in the property for a continuous period of at least six months, commencing within 12 months of either settlement or completion of construction (the residency requirement).
Things to think about...
Starting the journey towards home ownership by buying land is very exciting, and it’s important to remember that any property you buy is generally a long-term investment.
Before you buy land to build your new home you need to think about your long-term needs, such as whether you intend to start a family or where you plan on working in the years ahead. This could influence the suburbs you look at and the size of lot you buy in order to fit a bigger house, or you may wish to have more outdoor recreation space or possibly even a swimming pool.
The right location.
The oft-repeated expression “location, location, location” applies equally to buying land as it does to buying an established house. Buying land that is situated close to schools, hospitals, shops, transport and other services you need is extremely important.
Don’t underestimate the value of being able to walk, cycle or drive only a short distance to parks, shops, schools and city-bound transport.
An appreciating asset.
In addition to meeting your lifestyle needs, the land you buy and the house you build on it will be your biggest asset and history would suggest is one that should grow in value (or appreciate) over time. It is important that you look to buy in an area where property values are likely to increase over time so as to maximise your resale value five, 10 or 15 years down the line.
One day you may wish to sell and upgrade to a bigger home or different location or retire to the coast. Having a lot of equity in your home could also help fund your retirement.
Do your research.
It’s easy to get caught up in the excitement of the house-and-land dream when buying a block of land. Before you think about putting a deposit down and signing a contract of sale, you need to do your research in a number of areas to ensure it’s the right decision for you.
If you are buying within a residential development or new estate brochures are just one element to take into consideration.