Everything You Need To Know About Buying House And Land Packages In Melbourne
Most Australians dream of owning their own home, perfect for their family and lifestyle; and what better way to achieve the perfect home than by building it yourself?
Melbourne house and land packages are a great investment for those who want to buy a brand-new home with plenty of benefits and in the most liveable city in the world.
What Is A House And Land Package?
While it may sound simple, understanding house and land packages can be confusing, especially if you’re new to buying property. A house and land package usually involves two separate contracts: one for the land, and one for the house. You’ll need to enter into a contract with the builder to build the house and a separate land contract with the developer.
This is different to an off the plan package for an apartment or townhouse, which entails a single contract and an initial deposit, and then settling on the remainder after it has been built. (This is usually easier for townhouses and apartments which have multiple investors, as opposed to a house which will have a single buyer and owner.)
A house and land package, however, involves paying off the cost of the land before building, and then paying instalments on the house to the builder during the building process on a separate contract.
So, buying a house and land package means just that – you’re buying land and you’re buying a house in a package deal, but with a contract for each.
Why Should You Buy A House And Land Package?
According to statistics about Melbourne building approvals from the Australian Bureau of Statistics, “the trend estimate for private sector houses approved rose 1.0% in July and has risen for five months.”
There’s a growing trend in buying house and land packages in Melbourne, and it’s easy to see why. Benefits (such as stamp duty and tax depreciation) are why house and land packages are becoming more appealing to Melbourne buyers, along with the advantages of newness and choice. Also, as house and land prices increase, it makes sense to invest now and see the market value of your property increase while you build.
When you buy a new house, you will usually have to pay stamp duty on the property as part of a land transfer tax; however, when you buy a house and land package, you only need to pay stamp duty on the land, as the land and house have separate contracts. You can save money this way, as stamp duty for both the house and land would be respectively higher. To calculate stamp duty, use the calculator on the State Revenue of Victoria website here.
For those looking to save money, the tax depreciation benefits of a house and land package are a huge positive for investors. You can claim tax on depreciable assets like fixtures, fittings, and even some of the construction costs. You might also be able to claim on rates and interest payments. These benefits are greatest when the property is newest, so a house and land package is great for your savings.
First Home Owner’s Grant
If you’re buying your first home in Melbourne, you can receive up to $10,000 with the First Home Owner’s Grant, for homes valued under $750,000.
To read more about the first home owner’s grant, see the State Revenue of Victoria website.
Designed For Your Lifestyle
When you buy an established property, you have to make do with what you’re offered and will often have to compromise on a few features you wanted. When you buy a house and land package, you have the freedom to include everything you want and choose a design that suits your lifestyle and family. You can customise (to a degree – make sure to check with the builder about any restrictions they might have) to suit your needs and your budget.
It’s Brand New
A brand-new home is great for first home buyers who want to have a property they can really call their own; and for investors, tenants will be more attracted to the new fixtures and fittings.
As we learn new and better ways to build, over time this means that a new home will often be built with more environmentally friendly fittings and materials than older homes, and the latest in designs and surfaces. For those who want a modern home with the best the market currently has to offer, it’s better to buy new.
Established properties might require renovations, maintenance, or alterations, which all adds to the cost of purchasing a property. You can waste a lot of time (and even more money) trying to bring an established home up to your standards. A new home, on the other hand, will maintain its value for a longer period of time, and with brand-new fixtures, fittings, and materials, your new house won’t need the upkeep and will last longer without the hassle of renovations.
Traps To Avoid When Buying A House And Land Package
When you build a home, there’s a potential for problems to arise during the building process, such as delays or having to spend extra money along the way. Make sure to plan ahead and budget conservatively just in case.
If you’re investing in a new property with the intention of renting out to tenants, then you’re not going to see any returns on your investment for a while as the property is built. Make sure to save ahead for the building period.
Be prepared to wait for your new home. The building process can sometimes be delayed for a number of reasons, and this can be a negative for some buyers. Make sure you consider time delays when buying a house and land package.
Why Is Melbourne a Great Place to Buy A House and Land Package?
Melbourne has not been named the most liveable city in the world for no reason. It bursts with culture, art, music, fashion, and food. It has great public transport systems and high levels of safety. It’s diverse and full of interesting people. There’s lots to do and lots to see. But, most importantly, there’s plenty of opportunity for those looking to buy in Melbourne right now.
With a 9.7% growth in population, buying property in Melbourne is more popular than ever. The region had 1,741,976 residential dwellings in 2016, growing from 1,572,171 residential dwellings in 2011.
As the city grows more popular, it’s more appealing to buy in the greater region if you’re looking for a quieter home life than the bustling inner city can offer.
Location and Weather
House and land packages are growing in popularity in greater Melbourne, which encompasses the region from Point Cook in the west all the way to Officer in the east. Much of the region surrounding the north, east, and south of Port Phillip Bay, where there are a number of beaches and ports.
The City of Melbourne website states that “Melbourne residents enjoy a temperate climate influenced by its location at the apex of one of the world’s largest bays, Port Phillip Bay.” The weather in Melbourne is a great bonus for those who can’t stand the heat of Australia’s more northern cities.
For professionals (who make up 24.% of greater Melbourne’s workforce, as of the 2011 census) looking to buy a house and land package in greater Melbourne, you can be as close or as far from the inner city as you like; you could settle in the suburbs but still be close enough to the city for work and weekends.
It’s A Multicultural City
According to the Australian Bureau of Statistics, as at 2016, Greater Melbourne has a population of 4,725,316 people. The city has a diverse, multicultural community, with 31.5% of people being born overseas.
For couples with children (approximately 48% of Melbourne families), the greater Melbourne area is a great place to raise your family. A house and land package in Melbourne is popular for those wanting a larger family home rather than an apartment or townhouse.
Schools and Education
The Greater Melbourne region has nine universities, seven TAFEs, and many more primary schools and high schools to offer. The Australian Government website, Future Unlimited, states “[Greater Melbourne] has 5 of Australia’s top 20 universities, one of the world’s top 30, and 2 universities in the world’s top 100.”
Use the handy schools search here to find the right school for you, whether it be primary or secondary, public or private, co-educational or single-sex, Catholic or independent.
For several schools, potential students must live in certain catchment zones to be able to attend. This can make certain suburbs competitive for buyers, so make sure to research what schools you can attend depending on where you want to build your property.
Melbourne is renowned for its great public transport services, especially by bus, train, or tram. While many people prefer to drive to work to get around, it can get congested in the city; for those looking for more environmentally-friendly options, there’s plenty to choose from. Check the journey planner on the Public Transport Victoria website to view your transport options.
Health and Hospitals
Health is taken seriously in Australia, and Melbourne doesn’t lack for hospitals or health services. There are numerous private and public hospitals, including The Alfred, Beleura Private Hospital, and Sandringham Hospital, plus many, many more.
There’s no shortage of things to do and see in the greater Melbourne region. There are plenty of parks and nature reserves: such as the Dandenong Ranges, the Victoria State Rose Garden, and the Werribee Open Range Zoo (where the animals aren’t enclosed in cruelly small spaces but can roam free on 225 hectares of open savannah).
For club goers, there’s a great nightlife scene in Melbourne, and plenty of bars, pubs, and clubs to choose from, including comedy and jazz clubs, wine and karaoke bars, dance clubs, and discos.
Melbourne has a rich history, and for those looking to invest in the area, there’s a plethora of historic sites to go and visit to immerse yourself in the city’s rich history and culture. You can visit the infamous Old Melbourne Gaol, which housed Ned Kelly or catch a train from the iconic Flinders Street Station to the outer suburbs. Rippon Lea is a preserved 19th-century suburban estate, and the mansion and gardens are the last in Australia that you can still visit.
Overall, it’s hard to beat the greater Melbourne region when it comes to livability, culture, health and safety, entertainment, and potential for growth.
If you want to know more about the property and development activity in Melbourne, go to the City of Melbourne website and see their 3D Development Activity Model.
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If you still have questions, get in touch with us today to figure out if a house and land package is for you.
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