Buying land to build in Melbourne? What to check before choosing a block

18th September 2023

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Buying land to build in Melbourne or Geelong? Learn how to compare titled and untitled blocks, check if your home fits and assess developer incentives.

Buying land to build in Melbourne? What to check before choosing a block

A block can look like good value on an estate price list. But can you fit the home you want on it, and will the land be ready when you need it? Those two questions can change which block makes sense for your budget.

In the Home Building Hub episode Land update with Will Anderson from RPM, hosts Colin Bischof and Darren Brennan speak with Will Anderson from RPM Real Estate about land sales, smaller lots and developer incentives. The conversation reflects the 2023 market, with examples from Greater Melbourne and Geelong. Use those examples to guide the questions you ask when comparing blocks today.

Titled or untitled land - how does it affect your build?

A titled block has a registered title, so you can work towards settlement under the contract. If the land is untitled, you’ll need to plan around the developer’s estimated title date. In the episode, Will recalls earlier periods when buyers faced estimated waits of 12 to 24 months, with demand and delays delivering subdivisions contributing to longer timeframes.

Titled land can bring your plans forward, but ask your builder how long they need for design, approvals and site preparation. If you’re considering an untitled lot, ask the developer how the stage is progressing and check what happens under your contract if registration is delayed.

Before you choose a block, confirm:

• Whether the lot is titled and, if it is untitled, the latest estimated registration date.
• When settlement is expected and how much time you’ll have to prepare.
• When your builder can review the lot and when they expect they could start.
• How a change in timing could affect your build quote and budget.

Will your home design fit on a smaller block?

Will describes a shift away from larger lots such as 448 m² and 512 m² blocks towards lots in the 300 to 350 m² range and below 300 m². He points to affordability and the need to accommodate population growth as reasons for that shift.

Total area tells only part of the story. A rectangular 448 m² block might measure 14 m wide by 32 m deep, while a 512 m² block might measure 16 m by 32 m. That extra frontage can matter if you want a double garage or a particular floor plan. On a smaller lot, deciding which features matter most can help you find a design that uses the available space well.

Give your builder the lot plan and any available design guidelines before you commit. Ask them to check:

• The frontage, depth and shape of the block against the house and garage layout.
• Setbacks, easements and estate guidelines that may affect where the home can sit.
• How much usable outdoor space the design leaves.
• Whether slope, site conditions or changes to the floor plan could add to the quote.

Compare developer incentives against the full build cost

One of Will’s observations was that a lot’s advertised price can stay steady while the offer changes. He recalls developers using rebates and other incentives during periods when prices had levelled off. If you see a promotion today, ask the sales team to set out the offer and its conditions in writing.

Put competing blocks side by side and compare the land price, build quote, likely site costs and any design changes the lot requires. Then check when each incentive applies and whether it affects what you need to pay upfront. A rebate received later has a different effect on your budget from a reduction in the price payable at settlement.

Should you wait for the land market to bottom out?

Will points out that the lowest point in a market cycle is easier to identify in hindsight. For a home buyer, a more practical starting point is to understand your borrowing capacity, compare current lot prices and ask a builder to assess the blocks you’re seriously considering. That gives you a way to judge whether a particular block works for you based on the information you have.

Glossary

• Titled land

  • A lot with a registered title.

• Untitled land

  • A lot for which a separate title has yet to be registered.

• Frontage

  • The width of a block along its street boundary.

• Setback

  • The required distance between a building and a boundary or other specified feature.

• Easement

  • A right to use part of the land for a specific purpose, such as drainage or access.

Frequently asked questions

Can I start building as soon as the land is titled?

Ask your builder for an expected start date. Settlement, site assessments, approvals and the builder’s schedule can all affect when work begins.

Can I build a family home on a block under 350 m²?

It depends on the dimensions, the applicable requirements and the floor plan. Have a builder check how the home, garage and outdoor space would fit on the specific lot.

What should I ask about a developer rebate?

Ask how much it’s worth, which lots qualify, what deadlines or conditions apply and when you receive the benefit. Compare the offer using the total land and build costs.

Key Takeaways

• Check title status and compare the settlement and build timelines before choosing a block.
• Ask your builder to assess the specific lot and floor plan, especially if the block has a narrow frontage.
• Compare the full land and build cost, including site costs and any incentive conditions.
• Use current estate price lists and title estimates when applying the episode’s 2023 market insights.

Watch or listen to Land update with Will Anderson from RPM on YouTube.

About the Home Building Hub Podcast: The Home Building Hub podcast, hosted by industry experts Colin Bischof and Darren Brennan, is Australia’s premier resource for new home buyers. With weekly episodes featuring special guests, the podcast provides objective, high-quality insights into the home building process - completely free and without sales pitches. From understanding financing options to navigating the complexities of building a new home, each episode is packed with actionable advice and tips. Explore more episodes at http://www.homebuildinghub.com.au and join our growing community of informed home buyers.

Disclaimer: This article was generated by AI based on a transcript of our podcast episode and may contain inaccuracies or omissions. Whilst we’re all about providing value to you, this article should not be considered as legal or financial advice. It contains general information only and is based on the content discussed during the podcast episode. This information is relevant to the episode’s release date and may not be applicable at the time of reading. Always seek independent professional advice tailored to your personal situation before making any legal or financial decisions.