Should I Buy a House and Land Package? Here are the Pros and Cons

When you’re have the chance to own a brand new home complete with a piece of land in a planned community or development, it’s not hard to see why a house and land package can be an attractive and convenient option for many homebuyers.

And it’s true that there are many benefits to opting for a house and land package, whether it’s your first home purchase or you’re seeking a change. However, just as with any property decision, it’s essential to weigh the pros and cons before you go ahead.

If you’re wondering whether a house and land package is right for you, check out the advantages and disadvantages below to help you make a decision.

Benefits of Buying a House and Land Package

• Customisation: A major advantage of buying a new house and land package is the opportunity to customise your new home based on your needs and lifestyle. Depending on your package inclusions, you may be able to select from a range of home designs, floor plans, fixtures, and finishes - resulting in a home that reflects your personal style and preferences.

• ‘All in one’ purchase: As the name suggests, a house and land package means you get to buy both your house and a piece of land in a single transaction, rather than having to coordinate these purchases separately. This streamlined approach can save you money, time, and hassle. 

• Warranty and guarantees: As house and land packages involve the construction of a new home, you’ll get the peace of mind of the builder’s warranties and guarantees. These may cover structural defects, workmanship, and materials for a certain period, providing reassurance against unexpected issues or costly surprises.

• Energy efficiency: An advantage of a new build is that it will usually be built according to modern energy efficiency standards, with eco-friendly solutions such as insulation, double glazing, energy-smart appliances, or solar panels. As well as being better for the environment, this can also help to reduce your household energy bills.

• First Home Buyer incentives: Many Australian states and territories offer incentives and grants to first home buyers purchasing new properties, including house and land packages. These incentives may include stamp duty concessions and government grants designed to make it easier for first-time buyers to get on the property ladder.

Drawbacks of Buying a House and Land Package

• Limited location options: As house and land packages are often located in planned communities or developments, there may be a lack of options in desirable locations. If you choose this option, you might need to compromise on things like proximity to amenities, public transport or other services.

• Lack of established community: When you buy a house and land package in a developing area, the community around it may need some time to grow and develop. This could mean there won’t be as many amenities or community facilities compared to more established neighbourhoods.

• Construction delays: While on paper, builders should complete new homes within a specified timeframe, the reality is that construction delays can and do occur. Whether it’s due to adverse weather conditions, material shortages, or unforeseen issues, delays can cause you frustration and inconvenience.

• Potential for hidden costs: While a house and land package may seem more affordable at first look, you may find there are additional costs you hadn’t expected. These can include site preparation, landscaping, upgrades, and variations to the standard inclusions offered by the builder. Be sure to budget for any additional expenses to avoid unwanted surprises.

• No established vegetation: New house and land packages may lack established landscaping and vegetation, which can impact their visual appeal. Be prepared that you might need to invest time and resources into landscaping and gardening to create a more attractive outdoor space.

Buying a house and land package can offer a wide range of benefits to homebuyers looking for a convenient and customised option. On the flip side, this type of property purchase also comes with its own set of potential drawbacks that buyers need to be aware of.

With plenty of research and a good understanding of everything involved in the process, you can decide if a house and land package is the right choice for you.

Keen to learn more about the home-buying process? Check out our other articles and stay in the know about all things home loans.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.

Unloan is a division of Commonwealth Bank of Australia.

‍Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000.

‍Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

‍There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.