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Buying a home

What you need to know before buying land

18 February 2021

Building your dream home starts with finding the perfect location. We talked to two experienced real estate buyer’s agents about how to buy a block of land that ticks all the boxes. 

Their advice in a nutshell: start with a wide net and a vision for the house you want to build. Then ask lots of questions and do plenty of research until you’ve found the perfect spot.

Know your priorities and get a feel for the market 

Zoran Solano of Hot Property Buyer’s Agency works with clients in the Brisbane area. Thanks to the range of government incentives available, he’s been seeing increasing interest in house and land packages, especially among first home buyers.

Zoran advises clients to first consider all their options. “You may not be able to get into your dream suburb if you’re looking at buying land,” says Zoran. “Undeveloped blocks are scarce in many suburbs, so it makes sense to be open to the opportunities in the areas you love.”

Once you’ve made the decision to build, Sydney-based Luke Moroney of Search Party Property recommends spending time in the market, getting to know different areas, developers and sub-divisions.

“Try not to make last-minute decisions, give yourself a minimum of six months,” Luke suggests. “You want to get a real sense of local buying opportunities, the community you’re buying into, and the pros and cons of individual blocks. There’s a lot of due diligence required when you’re buying a block of land.”

Research the area before looking at sites

Consider the wider community: what are the local services, amenities and growth prospects? If you’re raising a family, enquire about local schools, including the boundaries of catchments. Get a sense of the roads during rush hour, access to public transport, and local shopping, services, parks and pools.

Luke recommends joining neighbourhood groups online. “Private Facebook groups can be a good way to get expert local advice, and to find out what’s really happening in the community.”

Zoran says when you’re buying in outer suburbs, research any re-zoning of local farmland, and plans for new roads, highways or rail lines. He recommends looking for an “element of scarcity”. Natural boundaries such as parkland can help boost an area’s long-term capital growth.

Take a house-first approach 

“Different blocks of land are fit for different types of builds. The contours of a property can dictate the style of the house,” says Zoran.

“It’s a chicken or egg kind of situation…working with a builder from the early stages can help ensure that when you’re evaluating parcels, you’re doing so with the house you want to build in mind.

“While most developers will be offering clean, flat parcels of land, that may not be the right choice for you.”

Look for opportunities to get in early

Luke says, “Typically land prices are relatively cheaper in newer sub-divisions, and they increase over time.”

He recommends spending time understanding how prices fluctuate at different stages of development. He also reminds early stage buyers to be aware of what’s to come.

“As other homes go up nearby, you’ve got to live with the dust and noise of construction…plan on doing lots of window cleaning!”

Ask the seller or agent for all the information they have

Vendors are likely to tell you about a block’s sunny aspect and growth potential. Don’t hesitate to ask detailed questions about the site itself and request all the reports available. If you’re buying undeveloped land in regional or rural areas, be prepared to do your own investigations.

Here’s a top-line list of what you should be looking into:

  • Local regulations: when buying outside of a development, talk to the council about zoning, overlays (such as heritage or wetlands overlays), lot sizes and neighbourhood plans. Find out whether your new house will need planning approval, and keep in mind that planning approval is separate to building approval.
     
  • Flood, bushfire or cyclone risks: these could impact your ability to get construction financing and home insurance, so you want to review any reports from the vendor and council and know the type and level of risk involved. Even if a block is far from a river or creek, it may be subject to overland flooding after heavy rains. Before buying undeveloped land, you may need hire an engineer with hydrological and hydraulic assessment experience to prepare a property-specific report.
     
  • Infrastructure: The cost of connecting an unimproved block to utilities such as water, gas, sewerage and electricity can be steep. When choosing a site, keep in mind costs generally increase the further you build from the nearest street access points. When buying in a housing estate, service connections are usually already in place. Don’t forget to note the locations of storm water drains, power poles and other utilities, as they can limit where you can position your driveway.
     
  • Site investigations: Ask sellers or agents for the results of a soil test as well as the survey plan. Soil condition, ground slope, water table proximity, as well any obstructing trees, rocks and utility trenches can impact the cost and complexity of construction. For example, low-quality soils may require an extra-thick slab and even concrete piers for stability.

If a more detailed investigation is necessary, ask your builder to recommend a local geotechnical engineer with home construction experience.

Talk to a lender about financing

When you’re planning to buy and build, getting pre-approval on a construction loan can give you a good idea of how much you may be able to borrow. Suncorp Bank home lending specialists are happy to help answer all questions.

 

Talk to a home lending specialist

 

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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs.

Home Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No. 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Fees, charges, terms and conditions apply and are available on request. Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Information provided is general advice only and has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.