There are so many new home and land options available to potential new homeowners in Australia, with the expertly crafted house and land package increasingly becoming a winning choice.
A house and land package is a popular option that is affordable, and gives you personalised choices in a yet-to-be-built home.
There’s no doubt a house and land package is the best way to achieve a home that is perfectly in line with your dream design and at a fixed price. However, the tough part is knowing how to compare the many different packages on offer so that you can build with confidence. You want to know upfront pricing, what’s included (and what’s not), what upgrades are available, how to customise the floor plan, and the important details such as warranties and guarantees.
Here are some guidelines to help you narrow the options and choose the best house and land package for your build journey to give you peace of mind.
What is in a house and land package?
A house and land package enables you to purchase a block of land from a developer and then select a preferred builder for the home design journey. It’s also helpful when the land and the home design are sold in a bundle deal, which means the land developer and builder have worked together to optimise the best house designs for the land available.
One of the most reassuring aspects of a house and land package is that it has a fixed price, which includes fixed site costs. This means you can have peace of mind that the block of land and the construction of the home will remain at the price you locked into the contract. No additional costs, and no unwelcome surprises!
What’s the best way to finance a house and land package?
The major difference involved in the house and land package option as a homeowner is that it requires two loans as part of the build process. A house and land package requires a regular mortgage on the land, as well as a construction loan to cover the house build. These two loans are usually bundled together at a fixed price, however, make sure you do your research to find out if this is the case in your circumstance.
1. Vacant land loan (land mortgage)
Once you've chosen your house and land package, the settlement will occur and the land ownership will be transferred into your name. This will mark the beginning of your mortgage repayments on the land. Stamp duty payments will also begin on the land component of your package. Check with your lender to find out if you’re eligible for a stamp duty exemption or concession. There are also other exemptions and grants to consider, such as the First Home Owner Grant (FHOG) and other finance initiatives to help homeowners make the build process more affordable.
2. Construction loan
You want to have peace of mind that your loan will cover exactly how much you require to build your new home so ensure you have pre-approval on your construction loan to support the payment schedules your builder sets for the build. Depending on your builder, there are likely six main building stages that require payments: deposit > base stage > frame stage > lock-up stage > fixing and fit-outs stage > completion/handover.
You will need to ‘draw down’ your construction loan to ensure that your bank pays your builder in increments at the end of each construction stage. By staggering payment you can achieve a more affordable build because you are only charged interest on the amount of money you have paid thus far. During your early research phase, find out how your builder structures their progress payments. For instance, at Henley Homes, six progress payments are required:
Deposit – 5% (minus the initial deposits you have already paid)
Base – 10%
Frame – 15%
Lock up – 35%
Fix – 25%
Completion – 10% (in addition to any variation orders)
It’s also important to ensure that you have an extra budget reserved in the case of any unforeseen additional costs and/or upgrades that you may realise you want later on.
What’s included in a house and land package?
The options truly are endless when it comes to designing your home. And that’s the beauty in purchasing a house and land package – all the basics, the must haves, are included and you get to customise the build to achieve the vision that suits your lifestyle, sense of style and family’s needs.
To help you make the design selection process smoother as you personalise your home, you may meet with your builder’s design team for inspiration sessions and interior design consultations.
Your builder will show you a range of colours, materials, fittings and fixtures to choose from and at Henley, we welcome you into our Design Showroom as many times as you like so you can get familiar and confident with your selections.
Discuss how your selections can be tailored to the floorplan, and what finishes and style you have in mind and feel free to roam the options. You will need to consider which inclusions you want – whether to stick with standard items or the upgraded products that may be on offer. You want to avoid surprises later on, so try to ensure you have all the information you need about your house and land package, such as what’s included, what’s not, upfront pricing, what are the upgrades, and more.
How long does it take from plans to handover?
A house and land package follows the same construction timeline as you can expect for other home builds, which may be anywhere from 6-12 months. Some of the variables which may impact the timeline are the weather, trade scheduling and material availability, but what’s important is that your builder keeps you up to date. Sometimes, delays cannot be helped, but trusting your building, having transparency and knowing your builder is on your team can change your experience from average to amazing.
