Buying in new land releases (pre-development)

I am not sure if this has been answered before (if yes, mods - please direct me to the thread and delete this).

A couple of questions on buying at new land release suburbs (specifically areas like Box Hill).

1) I understand that you pay 10% of the land price after cooling off but when do you settle? My understanding is not until land is registered in 1-2 years time?

2) How keen are banks on financing that 10% deposit knowing that money doesn't have a cash flow for sometime? We have equity to draw from but need to know if banks actually want to get into all that?

Any other tips on Box Hill or similar suburbs would be great. Cheers

 

Correct - settle after registration.

The banks (currently) would probably like to see you stump up that 10% deposit but it will depend on how they view YOU from a credit rating and serviceability perspective.

Bear in mind you are buying this land OTP. What contingency measures do you have in place if the land is worth less in 2 years, when you come to settle, than when you agreed to buy it today?

 

This is not the case everywhere, depends how busy the land titles office is. Sometimes it's already registered or just a couple months away.

 

We have the same contingency plan as whole of Australia when it comes to property i.e. none

On a serious note, unless land prices drop by 50%, we should be fine.

This is the tricky bit because I would want a firm settlement date from portfolio planning point of view like a long settlement but not too long. I guess this could be up for negotiation as well?

 

The contingency plan should be that you can afford to tip in more cash if required - sounds like you're covered.

Registration and being ready to be registered is really outside the control of the developer. Than can have an intelligent guess for sure but delays can happen for all sorts of reasons - rain, unexpected soil types, banks funding delays, etc etc. These are not really "up for negotiation as well". At best there will be a sunset clause allowing either party to terminate the contract by a certain date if land is not ready.