Titled land vs non-titled land - which is better?

30th October 2023

Finance & Budgeting Pre-Construction Legal & Contracts First Home Buyer Investor

Discover the key differences between titled and non-titled land, their pros and cons, and which option is best for your home-building journey in Australia.

Titled Land vs Non-Titled Land - Which is Better?

When buying land for your dream home, one of the first decisions you’ll face is whether to purchase titled or non-titled (untitled) land. At first glance, the difference might seem straightforward, but there are important implications for your budget, timeline and stress levels once the building process begins.

In this episode of the Home Building Hub Podcast, hosts Colin Bischof and Darren Brennan unpack what these two terms mean, their pros and cons, and how they affect your home-building journey.

What Does "Titled Land" Mean?

Titled land is land that’s been fully developed and officially registered with the local council and land authority. This means:

• Roads, gutters and footpaths are complete

• Electricity, water and sewer connections are ready

• The block is legally recognised and ready to build on

If you buy titled land, your builder can typically start construction shortly after settlement - often within weeks.

Key advantages of titled land:

• Ready to build - no waiting for council approvals or developer works

• More certainty - you can physically inspect the block

• Access to better deals - builders often prioritise titled blocks and may offer discounts or faster turnaround times

• Less risk of cost increases - your builder’s price protection period is less likely to expire

What Is "Non-Titled" or "Untitled" Land?

Non-titled land, on the other hand, refers to blocks that are not yet ready to build on. Developers may still be completing roads, services or infrastructure - or may not have started at all.

When you purchase an untitled block, you’ll typically sign a land contract and pay a deposit, but settlement won’t occur until the land is officially titled.

Why buyers choose non-titled land:

• Lower upfront costs - pay a smaller deposit now and save more while waiting for settlement

• More availability - sometimes titled land is scarce in new estates

• Opportunity to buy early - get into an estate before prices rise

However, there are real risks to be aware of.

Risks of buying non-titled land:

• Delays - if the developer can’t complete works or gain approvals in time, your land could be delayed for months or even years

• Rising build costs - your builder’s fixed-price period may expire, leading to higher construction costs

• Financing complications - your loan approval may lapse if delays push settlement too far out

• Continued rent payments - if you’re renting, delays mean extra living costs before you can move in

Current Market Trends - What the Data Shows

Colin shared insights from OpenLot and other developer data showing that up to 60-80% of buyers are currently opting for non-titled land, often choosing lots that won’t title for 12-24 months.

That’s a worrying trend for builders, who are concerned that many buyers might not fully understand the financial and timing risks.

Darren added that factors like interest rates, seven-star energy rating changes, and new gas regulations in Victoria are influencing buying behaviour. Many buyers are holding back, hoping for rate cuts - but the costs of waiting (like the upcoming 7-Star energy efficiency requirements) could far outweigh the small savings from a potential rate drop.

Titled Land Deals - Why Now Might Be the Best Time

Right now, there’s more titled land available than we’ve seen in years. Builders and developers are keen to move stock, and this creates opportunities for buyers to negotiate better deals.

You might find:

• Discounts and rebates from developers (often $10,000-30,000 off the list price)

• Faster site starts - builders like Metricon and others are reducing build start times to as little as 14 weeks

• Less risk - you can lock in your build price and avoid contingency fees or seven-star cost increases

Colin explains that titled land is also more attractive to builders because it helps them meet their monthly site-start targets, meaning they’re often more flexible with pricing and inclusions.

When Non-Titled Land Can Still Work for You

If you’re not financially ready to build just yet, untitled land can still be a smart move - as long as you understand the risks.

Before you sign, always:

• Check the forecast title date and ask for written confirmation from the developer

• Understand the delay clause - how long can you wait before you’re forced to settle?

• Plan your build contract carefully - make sure your price protection period covers any possible delays

• Talk to your builder - get their professional advice before locking in your block

As Darren puts it, “Sometimes titled land just isn’t available in your preferred area, so untitled is the only choice. Just go in with open eyes and realistic expectations.”

Glossary of Terms

• Titled Land - Land that’s fully serviced and registered, ready for immediate construction.

• Non-Titled (Untitled) Land - Land still under development, awaiting final approval before construction can begin.

• Title Forecast - Estimated date when untitled land will be registered.

• Price Protection Period - The time a builder guarantees your contract price before cost adjustments apply.

• Contingency Fee - Additional charge per month if your start date is delayed beyond the agreed timeframe.

• Seven-Star Requirements - New Australian energy efficiency standards increasing the cost of future builds.

Frequently Asked Questions

1. Can I build on untitled land? No - your builder cannot start construction until your land is titled and legally registered.

2. What happens if my land title is delayed? Your build price and loan approval could expire. Always factor in potential delays when planning your timeline.

3. Do titled blocks cost more? Not necessarily. In today’s market, titled blocks can actually be cheaper because developers are offering incentives to move them quickly.

4. Is it worth waiting for interest rates to drop before buying land? Unlikely. The money you might save in repayments is usually far less than the cost increases from new regulations or extended delays.

Key Takeaways

• Titled land = faster build, fewer risks

• Untitled land = more flexibility, but higher uncertainty

• Delays can cost you thousands in increased build prices and rent

• Right now is a great time to explore titled land due to rebates and discounts

• Always get professional advice before committing to any land purchase

🎧 Listen or watch the full episode here: 👉 Titled Land vs Non-Titled Land - Which is Better?

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 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.