Buying that piece of land in an ideal location in Donnybrook, Victoria and building your own home are a dream for many Australians. But this dream does not come easy. It is hard enough to find and afford that land that you want, but getting a good contractor for your dream house can be frustrating, too. For this reason, more and more Aussies are choosing to buy house and land packages for their many benefits. In fact, research reveals a 5.1% increase in house and land sales over the southeast region of Australia for the past five years.
How can I buy a house and land package?
Across Australia, land is progressively released by the government and bought by property developers for new housing developments. Developers will often buy the land to later subdivide into multiple lots to put up for sale. There are two ways to buy a house and land package:
- Buy the land, choose a builder to design your house, and, with a construction loan, build your home. The benefit of this package is that you get to choose the design of your house exactly the way you want it to be.
- Buy the land together with the newly built house on it in a single, fixed-price package. The advantage of this house and land option is that the house is ready for you to move in straight away, with all the appliances and fittings included.
These house and land packages can be a very attractive option to a lot of buyers who are into the property market. These packages can work well for young couples looking to start and grow their families. Established families looking to upgrade to a larger home and are willing to give up on the benefits of an inner-city lifestyle can also benefit from these house and land packages. Even investors who are looking to expand their portfolio will be interested in these packages.
What is the finance process of buying a house and land package?
Buying a house and land package is a dream come true for many Australians. One of the first steps in your journey to becoming a homeowner is to work out which of the two packages you should buy.
Choosing the first option means that you will need two separate contracts: one standard mortgage loan for the land and one construction loan for the house. Developers will usually need a 10% land loan deposit and then a 5% deposit during the construction of the house. The added advantage of considering this option is that government stamp duties will only apply to the purchase of the land.
For the second package, you may only need a 5% deposit. With fixed turnkey packages, there are usually no hidden costs. A warranty may also be provided for your peace of mind.
House and land packages are gaining traction because they offer savings over other methods of buying properties. Additionally, the whole system immensely simplifies the process of constructing a new house. You can tick multiple boxes at once in your journey through the property market.