House & Land Packages | Wealth 360°

March 2, 2021

If you’re interested in property investment and building wealth in Sydney, house and land packages offer a lot of potentials.
They’re financially lucrative in that you can save some money and they’re logistically lucrative in that, as the buyer, you’ll have more control over the process.
Still, there are some considerations to make when deciding between purchasing a house and land package or going for the more traditional route of buying an existing property.

To give you a better understanding of house and land packages, here, we’re going over how they work and the benefits they offer.

How do house and land packages work in Sydney?

A house and land package is a bundle deal where property buyers purchase the land from a developer and a newly built house from a builder. While these deals are separated into two separate contracts and two separate loans, developers often partner with builders which is why we house and land package options.

In the majority of cases, house and land packages Sydney-wide are fixed price offers. However, you are able to negotiate with the right strategies.

House and land packages are different from normal residential real estate because you get a clear understanding of the cost upfront. Plus, it’s less likely that you’ll be surprised by a faulty foundation, hidden fees, or some other unforeseen issue.

However, financing is a different story when it comes to purchasing a house and land packages versus an existing home. With an established property, you only have to take out a regular mortgage loan. With house and land packages, you actually need two loans: a regular mortgage on your land and a construction loan to cover the house that’s being built.

Again, the loans will be bundled together but if you’re risk-averse, this might be a bit more overwhelming than buying an existing home.

Process of Buying House and Land Packages

If you’re interested in purchasing a house and land package in Sydney

it’s best to start with a buyer’s agent. A buyer’s agent saves so much time and helps you make decisions based on expertise in the real estate industry.

From there, you’ll start shopping for a block of land that meets your requirements.

You might have a certain sized plot in mind or you might be looking for a spot in a specific suburb. Either way, before anything else, you’ll look to find available land that fits your budget and meets your expectations.

Then, you’ll get in touch with a builder who will build your house from the ground up.

This is the fun part where you’ll be involved with the design process. You can visit display homes that will give an idea of different layouts and package options with various fittings and appliances.

Buying a house and land package can take far longer than buying an existing home.

Not only does it usually take a while to find and secure a plot of land, but building the house itself can take up to a year... maybe more!

As with anything, it’s usually best to expect that things will take longer than you think.

Especially since building a house relies on many moving parts, if other pipelines get delayed, it can cause delays for the builders. So, just keep that in mind.

Can you negotiate house and land packages?

Yes, you can negotiate house and land packages, especially if you work with a buyer’s agent during the purchasing process. Buyer’s agents are expert negotiators. In fact, our negotiation skills are one of the main reasons we’re so valuable to buyers.

When it comes to buying property, it’s easy for your emotions to get involved. And it makes sense. It’s probably one of the biggest purchases you’ll ever make.

By trusting an expert in the real estate industry to handle your negotiations, you can be sure that there’s someone on your side who’s advocating for you, without their emotions getting the best of the situation.

Another reason it’s important to negotiate your house and land package is that there are multiple contracts up for grabs in the process. As we went over previously, you’ll sign a contract for the land itself as well as a separate one for the house that’s getting built on top.

That means there’s even more room for error when it comes to getting the best deal possible. In short, you’ll want a buyer’s agent who understands the market and who can make sure you’re not getting ripped off on either end.

Not only that, but buyer’s agents help you negotiate the best way forward every step of the way. With their insider connections to the best contractors, property solicitors, and electricians, they’ll have a leg up in the negotiations straight away. They’ll continue to point you in the right direction long after the contracts are signed.

Almost everything is negotiable when it comes to buying property. The key is having the time, energy, and expertise to ensure the best outcome. So, while yes, house and land packages are negotiable, without a buyer’s agent, your DIY negotiations could fall short.

How much deposit do you need for a house and land package in Sydney?

In general, you should put down at least 5% to 10% of the value of house and land packages in Sydney. Also, keep in mind that you may need to get Lender’s Mortgage Insurance if you’re borrowing more than 80% of the value of your house and land package.

Lender’s Mortgage Insurance is usually paid as a one-off payment at the time you make your loan settlement. So, it’s important to keep this additional cost in mind if you plan to put down only the minimum deposit on your house and land package. If you can manage to put down a little more and avoid this extra fee, it could turn out in your favour.

Additionally, while you might be advised to put down as much as possible when purchasing a house and land package, it’s not necessarily always the best idea. How much you’ll put down in a deposit depends on your overall strategy.

For example, you may be able to purchase more properties by spreading your savings across several lower deposits. More properties often equate to more wealth creation and, therefore, it could be a better way to make money in the long run.

This strategy can be particularly lucrative for investors. However, if you’re buying your land and house package to build your dream home that you’ll live in, putting down a larger deposit might work for you.

Of course, the amount you put down as a deposit on your house and land package will depend on your unique circumstances. When you work with a buyer’s agent, they can help you understand your options and come up with the best strategy for your particular goals.

Remember, in most scenarios, there’s always room for negotiation. As we mentioned above, buyer’s agents can negotiate on your behalf to ensure you’re getting the best deal possible.

Benefits of a House and Land Package

There are countless benefits of a house and land package for Sydney investors. Here are a few of the most common reasons why people choose to purchase house and land packages.

Save Money

First thing’s first, buying a house and land package can help you save money. Since they’re fixed price packages, you’ll start by securing a vacant land loan and start making mortgage repayments on only the land before the house is built.

Then, you’ll only pay stamp duty on the land component of the fixed price, never on the house. Not only that, but you may be eligible for stamp duty concessions. Plus, if you’re a first time home buyer, you may be exempt from paying stamp duty altogether.

Talk to your lender about your options or consult your buyer’s agent to make sure you’re saving the most money possible.

Clear Upfront Cost

Another huge perk of purchasing a house and land package is the clear upfront cost. While building a house might take a bit more time, it’s not as likely that you’ll pay any more than what’s expected in your initial contract.

Contrary to renovating an existing home, building a property from scratch offers more clarity and you’re less likely to come across any unexpected issues.

Simplified Process

Especially when you work with a buyer’s agent, house and land packages Sydney-wide go through a streamlined process. In general, both developers and contractors have clear expectations and a straightforward path towards building your home efficiently.

Plus, with the expertise of a buyer’s agent, the process becomes even simpler. A good buyer’s agent will liaise with your builder, developer, lender, solicitor and the local council to make sure all information flows in a timely manner. This means nothing critical is missed and takes that responsibility off you.

Unless you come across any huge curveballs, buying a house and land package is often a lot simpler than purchasing an existing home or doing a DIY reno.

Final Thoughts

All in all, house and land packages offer money-saving incentives, a streamlined process, and clear upfront costs. You’ll have more control over the design and layout of your new home and you may even get to choose the exact suburb you want to live in.

However, building a house from scratch takes quite a lot of time and you’ll need to take out two different loans to secure a house and land package.

Still, they’re a lucrative option for building wealth and even increasing the value of surrounding homes. To learn more about house and land packages, our Sydney-based buyer’s agents are here to help. Contact us today!


What is a house and land package?

A house and land package is a way for property buyers to purchase land from a developer and a newly built house from a builder. Although they require separate loans, the process is bundled into a house and land package that makes the process more streamlined.

How much deposit do you need for a house and land package?

You need at least between 5% and 10% as a deposit to put down on a house and land package. If you put down less than 80% of the value of your house and land package, you’ll also need to secure Lender’s Mortgage Insurance. However, keep in mind, that you’ll only pay stamp duty on the land and in many cases, particularly for first home buyers, you may not need to pay stamp duty at all.

What are the benefits of a house and land package?

The benefits of a house and land package include

1) saving money by only paying stamp duty on the land or avoiding stamp duty altogether

2) clear upfront costs compared to a renovation that commonly presents unexpected expenses

3) a simplified process that’s more streamlined than many others ways to buy property.

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