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2018-10-02 Property Tips
Author: Satterley

House and land package finance advice for buying in Australia

House and land package finance might seem complicated, especially compared to buying an existing property with a common home loan, but there are a lot of benefits to buying land and building your own home that make the extra steps more than worth it. If you're close to making a purchasing decision and looking into finance, it's time to seek advice.

After selling more than 60,000 home sites across Australia, the team at Satterley are experts in house and land packages and are here to help. To find out more about the financial process behind buying land and building your home, we spoke with Satterley's Charlie Lawlor, general manager of sales WA, and Rebecca Shackleton Hay, sales and marketing manager VIC and QLD.

  • Note: All advice provided in this article is of a general nature. Before making any decisions, you should speak with a financial professional about your personal needs.

Existing property vs. house and land package finance

Finance for established real estate is relatively straightforward. The price is known at the outset, and the additional transaction costs can be easily calculated.

However, building a new home requires separate contracts for the vacant land and construction - lenders will finance the land and home separately. Where a loan for construction differs from acquiring an established property is that, for construction, you will receive payments in chunks (known as ‘progress payments’) as your build progresses. You may see this process referred to as a ‘construction loan’.

Pros of the house and land package finance process

There are many reasons buying a house and land package can be better for some people than buying an existing property.

For one, according to Charlie and Rebecca, with new house and land packages, buyers can understand all of the additional costs upfront when they secure their loan - there are no hidden surprises, as you might find when buying an existing property (for example unexpected repairs, pest inspections and redecorating costs).

In Victoria specifically, first home buyers may qualify for stamp duty concessions on the land. You can calculate if you qualify by visiting the State Revenue Office website.

Additionally, a lot of builders offer financing options for buyers. Some of their house and land packages feature bonus inclusions only available as a package, making them an attractive option.

Another benefit is the quality of the product. While perhaps not directly related to getting a loan, the quality of your home, and its community, could influence its future resale value (which could help you make the loan value back, and then some). That's why Satterley partners with reputable builders to produce quality house and land packages, bringing together land with a house designed to suit it.

The quality of your land, home and community are as important for finance as the loan itself, as they influence future resale value.

Good questions to ask your Satterley Sales Professional

A number of other factors could affect your budget when building a home in Australia. However, when it comes to purchasing a house and land package specifically, you can ask a lot of questions in advance to help you paint a picture of what to expect. Again - no hidden surprises.

So what questions should you be asking your Satterley Sales Professional?

  1. What is included in the house and land package?
  2. What is not included?
  3. What amenities are near the estate, such as schools, shops, hospitals and public transport routes?
  4. Are there plans for new parks, schools, daycare centres or shops to be developed in the area?
  5. Does the estate developer have completed properties that you can visit to judge their quality?
  6. Are siteworks included in the package? Note: If so, are they included as a provisional sum (also known as a cost estimate)? It is important that this allowance is realistic. Ask your builder's rep to break down the sum for you to examine.
  7. What are the steps in the house and land package process, and what are their timeframes?
  8. Is the land titled or untitled at time of sale? Note: Untitled land may suit you if you're still saving, as it can lock in a fixed land price while you wait for the title to issue. Although the land value may rise in this time, your price doesn't.
  9. What is the soil classification? This will impact building cost.
  10. Are bushfire protective measures required (which are measured by Bushfire Attack Level (BAL))?
  11. When will the land be ready to build on, and how soon can my builder commence work?


If you're interested in house and land packages near you, check out Satterley's lots for sale online today.


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