The unprecedented property price growth we've had, pockets of undersupply across many parts of Australia and slow income growth, has meant that families and young couples are still finding it hard to find an affordable home. According to Canstar, the average first home buyer can afford around only one third of all homes in Australia, however this is even lower in Sydney, Melbourne and Perth.
First home buyers are being forced to compromise on their homes location, property type and number of bedrooms. But this isn’t all doom and gloom, house and land packages are still a desirable and affordable option for many buyers looking to enter the property market.
In fact, recent research commissioned by houseandland and Lonergran shows that 25% of Australians who are looking to buy their first home within the next five years will look to build a new home. A home build on average is more affordable than buying a move in ready home, with savings reported to be around 14%. House and land packages offer a good solution to the housing affordability crisis. Click here for the full report.
What are house and land packages?
Turnkey house and land packages
There are 2 ways to buy house and land packages. The first is called a turnkey purchase where you find the land and choose the house you like from specific designs. You’ll normally put down a 10% deposit, you’ll agree to the price, the fixtures and fittings and how it will and when be built. Upon completion they will hand you the brand new house and you will pay the balance.
The turnaround on these are normally pretty quick given the builder will want to get paid for the building work as they are carrying 90% of the cost. They however don’t offer you the freedom of choice to select your perfect location and often the number of design options are limited because all of the fixed pricing and building restrictions.
House and land
With house and land it is different. You buy the land and then decide what you want to build on the block. Instead of just paying a deposit and then the balance on completion, you’ll pay for your land and then through a building contract you pay for certain stages; the base stage when you get the frame up, lock up stage once it is all bricked or boarded up with a roof. The next stage is the fixtures stage and then completion stage.
The fear around home building has traditionally restricted buyers into purchasing turnkey solutions from builder / developers, however as technology has advanced the tables are turning. New solutions are coming into market giving buyers the tools and systems to enable them to be in complete control over their house and land package choices. No longer are buyers restricted to purchasing a block of land with a particular house design, products like the houseandland app enables buyers to match land with the latest house designs and be connected with a range of Australia’s leading builders. This model ensures the home buyer is in control, they have the freedom to swap land locations with house designs and choose their own builder. This has to be a good thing for first home buyers.
5 benefits of buying a house and land package?
You can choose the best design for you.
House and land packages offer you the option to customise your home. With 72% of home buyers claiming they would like to personalise their space and structure, this gives you the flexibility to do exactly that.
House and land packages and turnkey solutions are one of the easiest and fastest ways to buy a home that can be tailor made to suit a family’s needs.
Costs are clear
The price is normally pretty clear up front for house and land packages which is good for buyers whose finance is pre-approved. In many cases professional interior designers and architects are involved in every aspect of the design which ensures a high quality product without the costs associated with consultancy fees.
Technology advances gives control to buyers
With the likes of houseandland home buyers now have enormous flexibility to choose their perfect block of land, match it to their ideal design and select their preferred builder. The buyers are in total control of every step.
Up to 14% cheaper
A house and land package generally provides better value than an existing house in the same area. On average it costs about 14% less than a move in ready property.
First home owner grants
If you are buying a first home you may be eligible to receive the First Home Owners grant. Each state and territory varies but there are a number of great incentives for first home buyers buying a brand new property or buying land to build on.
Investor benefits
Because a house and land package is new, you’ll have a warranty if there are any problems. It will be easier to lease and likely to have few or no maintenance outlays. Plus, you can claim the maximum deprecation allowance on your tax return as new properties depreciate faster than existing properties.
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