Buying Land is an exciting experience particularly if it is the very first piece of real estate you ever buy. Generally, Land has no maintenance and will look the same in 20 years. It is usually half the price of established real estate within the area and will give a feeling of locking down a location without the large mortgage.
Did you know Land will appreciate better with no house on it (up to 1% better capital growth)? As soon as you build a new home, the house structure is depreciating. It also takes away the “blank canvas feeling” of allowing a future buyer the imagination to design and build “THEIR” own dream home.
A land purchase on the surface looks like an easy and effortless process. Our 20 years of hands-on experience has taught us the importance of doing proper due diligence before you buy saving you stress and money. The below information can save you up to $40,000 on costs generated by your block.
Location and Future Resale
Land Location – Land opposite parks or on top of a hill average up to 1% more capital growth per annum on average. When you walk out your front door you can have the option of staring at another home across the road or enjoying the landscape of a park. It is a form of insurance on resale.
Solar Aspect –Solar aspect is the way the block faces in relation to the sun. A Northern Aspect is considered the best. The best lots have North to the side or rear backyard areas. This allows natural light and warmth to enter the home in the winter months. At midday in Summer, the sun sits directly overhead while in Winter it falls to 34 degree angle. A good orientation can take advantage of this sunlight and naturally warm the home for free. If your backyard is facing South, in winter your home will cast a 4 to 9-meter shadow creating cold pavers and creating hard to grow areas. If your back-yard faces West, it will be hotter and not pleasant from 3 pm to 6 pm in the Summer months. Designing a house plan to an unfavourable orientation will ultimately cost more as it has to meet a minimum standard of 6 Star energy efficiency (now a State requirement). Examples of further requirements on a non-friendly orientation are – larger glass windows, skylights, wall insulation and thicker glass.
Future Infrastructure – the rule here is, you want infrastructure but not on your doorstep. Shopping centres, leisure centres, rail, bus routes/stations are all excellent for long-term growth.
Views – what you may see on a vacant lot may be lost once homes and fences are finished. A view adds more depth to a room making it feel more spacious.
Neighbour courtyard location – find out where your neighbour's courtyard is going. You do not want to clash outdoor areas. Of all the studies done on why people bought property “A” versus property “B”, privacy was high in the rankings. You do not want to walk out to your outdoor area only to hear clearly the neighbours conversation.
Bus Routes – confirm. You do not want a bus route on your street as it will have negative resale (nearby is ok). A Bus Stop can create unsociable behavior, promote graffiti and vandalism. You do not want people standing out the front of your home every morning at the same time.
Safety and Security
Road Blind spots – Be aware of children crossings, reversing dangers or mounds in the road that can create a hidden blind spot. Avoiding these dangers makes your everyday driving stress free.
Road Width – Width of road is critical to any block selection. A wide road is an indication of being or becoming a busier street, while a narrow road is an indication of moderate to low traffic. Property developers are now creating narrower streets as it is proven to slow traffic speeds. Wider roads are proven to have faster traffic speeds. Consider your options wisely as they affect noise pollution and can make reversing out that much harder if you have a trailer or a boat.
Traffic – Stop signs, give-way signs, Speed bumps, round about create additional breaking and acceleration noise.
Vehicle Headlights at Night – There is nothing worse at night than having a vehicle's headlights shining into your bedroom while you're trying to sleep. Look at the regular traffic flow and choose a block that steers away from this. The best blocks will typically not be on bends or at the end of a dead-end street.
Footpath Location – Often footpaths are not put in until the street is established. Confirm with your land agent. The pros and cons are about the same and more personal choice. If you have a footpath on your side will it create further problems to add reticulation later? Having a footpath to your side can also reduce the amount of front grass and landscape that you may need lowering overall front maintenance.
Peace of Mind
Unwanted Noise - Visit the site in the Morning and Evening to see the local and not local use of the road. Some roads are known as snaking roads whereby people use them as a cut through/shortcut to save 30 seconds on their morning commute. Look for nearby pumps or small council buildings that may run large reticulation systems for the local parks, check for buzzing of electrical conductors and buzzing.
Additional Road Noise – Drive past the existing homes on a Saturday afternoon and see what cars/motorbikes neighbours have. A Harley Davidson motorbike can be up to 5 times louder than a standard motor vehicle.
Air Craft Noise – This can be checked via the Landgate website.
Mosquito Prone – it is predicted by 2020 in Perth that there will be no more “A” Class large scale development sites left. It is predicted that all new housing estates will be closer to rivers, swamp land or low-lying areas. As the question, has a study been done confirming the mosquito’s population to the area.
Smell – you would not think this would be relevant to buying a new block. What we have seen over the last 5 years are more and more estates being built closer to Industrial areas, swamps and rubbish tips. Look at the prevailing weather over the Summer months and make sure this is not going to be a problem. If you are local to the beach, check for past news on seaweed gathering on the beach. Every year we see residents protesting against smell generated from commercial areas, so make sure you do your homework.
Aboriginal Heritage Area – If you are even near a Heritage area your home could be up for additional scrutiny by the local councils and potentially the tribe that was local to the land.
Location to Work – Perth is expected to have a population over 4 million people over the next 25 years. Roads will become congested and travel time to and from work will take longer. Make sure you drive from your block into your workplace in the morning, so you are completely aware of what you are signing up for! I have heard many a story where people have sold their dream home because they are spending 7 to 12 hours a week driving to work. That time could be spent going to the gym or relaxing with the family. Unfortunately, land sales brochures only sell the positives, so do your research.
Prevailing Wind – Understand where the prevailing winds will come from. Make sure your outdoor area is not going to be blown away in summer or winter. Wind will carry noise from main roads up to 500 meters and make it clearly audible. Make sure you visit the site during morning and afternoon wind patterns to realise the additional noise that can be carried.
Talk to people that live in the street – People love to talk about their street. Ask them why they bought in this street, what they paid, what incentives they had from the developer, plus what is the street like. Would they do anything differently in the future!
Future Developments sites (or Commercial land) – Is their land across the road or nearby that will have high-density housing near you. This will depreciate your land. We recommend staying away from strata lots where possible. Any land that is commercial or could be commercial we would strongly suggest keeping away from. There many many recent stories now in Perth of Apartments and Commercial shop fronts being built next to the family home. Again do believe the Land agent as He/She may be ignorant of future government planning in or around you. check with your local shire or council plus the West Australian Planning Commission (WAPC)
Internet Speeds – did you know one of the top 8 items on a renter’s checklist, is high-speed internet. With more streaming over the internet, a comfortable home is one with adequate and sufficient internet. Ask if there is an NBN cable in the area. Visit the NBN Co and check what the future plans are.
Mobile Reception – We take mobile reception for granted in this day and age, but new land estates can often take up to 2 years to have adequate “City style” mobile reception. If you run a business from home this is an absolute must that you check the availability and quality of signal. If reception is poor, visit the Telstra website (Here) and you can request an upgrade or further installation of mobile phone towers.
Phone Towers – Phone towers can be visually unsightly, and some people argue being too close to them on a permanent basis can cause health problems like cancer. From our research, we recommend being at least 300 meters away from any phone towers. *At this point in time there is no clear evidence on health versus phone tower locality, but some Doctors back in the 19th century used to endorse smoking, and we all know how that ended up. Why take the risk.
Loan Type – When organising a loan, make sure you specify what the loan is for. A house and land package loan is very different from an established residential loan. Make sure you understand the difference. If you have an established loan to purchase a block, you will be forced to create another loan down the track to cover the construction payments. This will cost thousands more in fees.
Loan Repayments – As with any land purchase, be fully aware of what your repayments will be once your loan is approved and you settle. Always check with your Finance Lender or use a reputable loan repayment calculator.
Legal/Contractual
Land Agent – A Land agent does not work for you, they work for the developer! Just like a Real Estate agent, they are not obligated to tell you everything unless you ask the right question. Be aware of this!!!
Hold the Block – Unlike established Real estate, most land buyers are not aware they can place on a block on hold for up to a month with most land agents. This allows you to complete your due diligence checks before you give the go-ahead to purchase. In this time we could design a suitable home and give you a strong indication as to all expected building costs, allowing you to make a decision on the total package.
Covenants – These control what you can and can’t build. Confirm with your Building Broker what additional costs will be to meet the covenant requirements. Some estates and some council have requirements that can exceed $30,000 to meet covenant requirements.
The Land Contract – Ask for a copy up front so you can read it in your own time. Unlike the building industry that generally use a HIA written Building contract, most land contracts are specially written for that particular estate (they are not generic). We have seen instances where there are clauses that allow the developer to resell a block if he fails to get a title within a set period of time (hardly fair especially if you have sold your existing property)
Easements – ask if there are any electrical or sewerage easements on the lot (these are/will be “no-build areas). To the unsuspecting purchaser, an easement can $3000 to $30,000 of additional construction costs to a home by way of requiring “piling” underneath the concrete slab. Piling is vertical columns of cement and steel built deep into the ground that go below major infrastructure pipes.
Building footprint- Some lots have a building footprint, so you cannot build where ever you want. Make sure you check this as it can have a major effect on your house design. It is generally something we see on rural style larger acreage lots.
Strata Title – Some blocks may be strata tilted but not advertised that way. If the block has a strata title, have you checked with the local government whether there are any special or further building requirements? As an example, the R-Codes of Western Australia require all strata lots to have a storeroom within the housing design.
Rates and Taxes – check what they will cost. Call the shire and confirm your rates plus find out what you will get for your rates.
Land Clearing – if there is grass or small debris on the block can the land developer clean the block up before you take possession (otherwise it will add to the rubbish removal builders costs). The block may look very presentable in March but by September could have 1-meter high weeds all over it. At this stage, the council may send you a warning letter stating that the block has to be cleared so it is not a fire hazard.
Confirmation - Are you sure the land parcel described in the purchase contract is the one you viewed? Check the certificate of title with Landgate. Just because the there is a sign on the lot with a lot number does not mean it is correct. Check the pegs in the ground as they are all labeled with a lot number, does this match up?
Hidden Costs
Verge Tree location - Most verge trees cannot be moved, so be careful it does not interfere with your future driveway or parking requirements. If the tree is large with branches, some councils will not allow you to run a verge or driveway under the branches or within 2 meters.
Flooding Potential – Climate change is upon us and the studies say there will be less rain but when it does rain it will be harder longer rainfalls that can create flash flooding in suburban streets. Look where any waterways or lakes are, look at your land height in comparison. You can actually request from the land agent a survey of the entire estate to check how high your land is in comparison to the entire area. If building on the coast, make sure you are at least 1 meter higher than sea level. Some new blocks will be under water in 70 -100 years leaving a false inheritance to your siblings. If you are buying land near a lake or low lying area it would pay to ask for an engineers soil inspection confirmation from the land agent plus we recommend taking a shovel and digging down a metre to check there is no water seeping into the hole. We have seen instances in Gwellup where a new home owner dug into his block and there was water seeping into the hole. This was caused by the land developer not completing the final drainage for the estate so again ask the hard questions now so your not in tears later!
Land Price – Land pricing is often determined by simply guessing what the market will pay as there is often no real sales evidence in outskirts areas. It is rarely set by sworn values. See if you can determine what you really should be paying, not just being told. All prices are Negotiable. The rule is if you can’t negotiate the price, negotiate the terms. A longer settlement will always be to your advantage. Confirm with your finance broker how many days they will need to supply a Formal finance approval. Land agents typically request the minimum time 14 to 21 days, but in reality, you will need 45 days for finance approval.
Insurance – check you can actually insure your home now, but more importantly in the future!
Questions to ask your insurer - Will climate changes affect your insurance premiums over time! The large insurance companies of the world have had major conferences to discuss the fine detail of not insuring homes that fall into high risk areas! What may be a low risk area today, may be high risk in 20 years!
Examples of this are –
Homes that near bush land or forests such as the Eastern Hills area of Perth (with forecast dryer weather, there is a chance these areas will become increasingly further susceptible to stronger and stronger bush fires).
Homes situated near low lying areas adjacent to water such as areas of Cervantes and parts of Mandurah may become prone to increasing storm surge that is predicted to rise up 700mm during a storm in the next 30 years.
Homes susceptible to flooding from future forecast torrential downpours affecting areas with high clay content due to low permeability soil, low lying areas or poorly drained areas. Councils such as the City of Gosnells are enforcing rules where by you cannot use the local waste water drainage system as it is pretty much at capacity. This forces the new home owner to add soak wells to almost every area that is not being built on, costing in excess of $25,000 to $35,000 to suite engineering drainage requirements.
Coastal Erosion specifically to the far Northern Beach suburbs
Homes that are susceptible to excessively windy areas such as High Wycombe, Armadale or low lying Coastal Areas as winds in storms and cyclones have been forecast to increase by as much as 30%.
A good example of a bad example was the Lismore floods in NSW in 2017. There where reports of insurers charging $30,000 premiums making a home in this area basically uninsurable (learn more). As of 2024, there are homes in these areas that have insurance costs over $70,000.
Stamp Duty – This is an obvious expense, but make sure you are aware of what you must pay. Check if you are entitled to a first home buyer grant or stamp duty concession. The beauty of building a home is Stamp duty is only payable on the land (not the construction component). Work out your stamp duty here.
Retaining Walls– Retaining walls can be very expensive. The price of one block to another may be minimal but retaining costs could skyrocket the final land price. The rule is, if you put a soccer ball in the middle of the lot and it rolls, you need retaining walls. I have had situations where retaining costs where over $45,000. I then told the developer I would not be recommending his estate in the future. A month later the land estate guaranteed all retaining would be covered by the developer! So if or where you can, organise a building broker or retaining wall installer to quote this up as it can be used in the initial negotiations.
Roof Protection for your New home - If the retaining wall to your property has a large drop on the other side which allows for 3 meters from your eaves of your home (eaves typically sit at (2.1 meters) there is a safety rule that will force your builder to allow for a balustrade system to the roof area in the event a tradesman slips off the roof. The madness in the thinking is a tradesperson can fall 2.1 to 2.4 meters and be ok, but anything over 3 meters is too dangerous (hence a roof safety system is required) If you are considering a block with excessive heights on the other side of the retaining wall, this can cost up to an additional $3500 on the cost of your home! Choose your block wisely as these are complete and unnecessary costs you will never get back come resale !
Soil type Coastal – Limestone on the surface is not a good sign and engineering requirements will require up to a 450mm sand pad to comply with engineering. A sand pad of this height can cost over $20,000. If you see only small amount of limestone remove them from the surface as your lot will be rated by an engineer’s visual inspection plus a soil test. Confirm with your developer that you block is an “A” class and ready to build on.
Soil Type Clay – If you see water sitting on the top of the block and not draining, the rule is you will need part of that clay removed from the site. Clean sand will then need to be added, plus the concrete slab and footings will need to be strengthened. If the developer has not already done this, we would suggest asking for a geotechnical report or organising one yourself before committing.
Rubbish on Site - It is not uncommon to have dumped rubbish from neighbouring building sites. In some cases other builders will use your land as a temporary dumping ground. Typically, they will have a schedule to remove the rubbish as well. Earth workers are known to dump sand and rubble on neighbouring building sites as a means of temporary storage. If you are concerned about this, get in touch with the builder and they will advise the time line it will be taken away. if all else fails, call the building department at the local council and they will get in touch directly with the builder. Councils have strong rules on this practice and will not put up with it. If you are building on a narrow lot building site, please be aware that in some cases there simply is not enough room for builders to store or deliver goods to the area. Be courteous about these situations as you may need to use a neighbours verge or area in the future.
Rubbish in the Site - This is quite common with older areas where strata lots have been created by inexperienced or first-time property developers. A block may look sandy and flat on the surface, but below, rubbish has been buried (such as the debris from the old home). The attached picture is a real life example of rubbish buried below the building site that cost over $3000 to remove. If you are buying in an established area where an older home has been demolished, we strongly suggest asking for a copy of the demolition quotation and checking that the building site has been raked to a depth of 600mm and is clean of "debris". Unfortunately this is a buyer beware situation ! (Refer our Demolish and Build Page for further info)
Fencing Costs – Are these included, or do they have to be budgeted for? If fencing is not included in the purchase price by the property developer but it is already in place, you will be expected to pay 50% of the cost to the neighbours. But, if the block is being resold, you will not have to pay for the fencing.
Fencing Position – If there is an existing fence, is it correctly placed in alignment with the boundary pegs. Once we organise a survey we can determine this.
Coastal Zone requirement – If the block is near the coast, it will require additional items within and around the home to meet upgraded and required building standards known as “coastal zone requirements”. There are 4 different categories costing in the range from $2,000 to $20,000. Confirm what extra this will cost you on your construction as this is often added over and above to the site costs.
BAL – “Bushfire Attack Level” was introduced to Western Australia in 2014. It is designed to make a home that is in a fire risk area safer for the occupants. BAL can add from $3,000 to $50,000 additional cost to your home. To see if your block is affected go to the map of Bush Fire Prone areas. We have had cases where simply clearing an adjoining area, we have nullified the BAL requirement. Examples additional BAL costs - fire rated garage door, fire rated brush seals to garage door, fire rated front door, metalic flyscreen’s.
Approximate BAL additional construction costs -
BAL12.5 to BAL40: $15,000 to $55,000 more than a non-BAL house
Meeting BAL Flame Zone (FZ) requirements: $65,000 to $285,000
Construction costs for BAL FZ: $50,000 to $140,000 additional
Construction costs for BAL 40: $55,000 to $75,000 additional
Construction Access – Your builder needs access to the rear yard with a place to drop materials off etc. If they don’t have this, it will add additional costs requiring manual labour or lifting of items with a crane. typical additional charges are around $1,000 to $4,000
Encumbrances - Have you checked with the developer or at Land gate whether the land has any encumbrances, easements, proposed resumptions or restrictive covenants? These appear on the certificate of title.
Titles creation – When are tiles available? Is there likely to be any delay in subdivision approvals that might delay getting a building approval? Are there any clauses that allow the developer to resell your block if titles take over 12 months?
Local Council - have you checked with the local government whether there are any future subdivisions, road changes, or any special building conditions or covenants that apply? Over and above encumbrances and covenants, there may be local planning policy that also has to be adhered too. Council directory
Curbing type – Some curbs are designed to force your driveway to be in one position. Some curbs are designed to steer water further down the street. How will this affect guests rolling up to your place to park on the grass?
Street Light Position? – Will my driveway be affected; does it buzz at night or is it very bright, will this affect my house design or where my bedroom positions will go. Does it add an additional layer of security to my home?
Deposit - Confirm Deposit amount. Often this is a set number by the developer but in a buyers’ market is always negotiable. Again if you cant negotiate the deposit amount, try negotiating the terms such as settlement times or finance times.
Construction Check - Have you checked with your building broker about the block size, shape and aspect to make sure it will accommodate your planned home? Consider the desired orientation. Does it suit an energy efficient design? Are frontages and clearances sufficient to meet local government planning requirements?
Services - Have you checked the availability of gas, water, sewerage, and electricity? In new areas, check whether sewerage has been connected to a main or whether it is collected in a tank near the block, and emptied by a truck at intervals or ideally has a 100mm white pipe (standard) sticking out if the ground or shown on the civil works map or developer marketing material. Check that gas pressures in the area meet your needs. Is the power overhead or underground? Check the soil around the water meter is not damp or leaking, if so make sure it is noted in the paperwork to be fixed up by the civil works contractor or developer. Is the electricity green dome in a practical location! It is not uncommon that an electricity dome has to be re-positioned. The cost to move a dome can vary around $2,500. Some service pits such as a Telstra or NBN pit are not traffic-able! Check where your driveway is going to be placed and have the developer confirm the lid to the pit is acceptable. If this has to be moved, it can be an expensive exercise. If in doubt call the Telstra Network Integrity Group on 1800 810 443.
Confirm approximate total construction costs– Don’t get caught up in the romance of buying a block until you know and understand all the hidden costs associated with your construction. Unfortunately, there are thousands of things involved in building a new home. A building Broker service has the experience to oversee and check you are fully aware of your costs and expenses.
The 4 types of construction costs are –
• Land Purchase (including Stamp duty and settlement costs)
• Site costs (done by the builder)
• House Construction (base Cost)
• Turnkey (finishing) items
As you can see the expertise and knowledge of a Building Broker at the front end of your Building journey can save thousands of dollars and make life far easier. Through prudent checking and upfront investigations, this information can save you up to $50,000 on the purchase of a block.