Buying Land in Victoria

Hi All:

I am from Melbourne and currently sitting with a portfolio of 2 IPs, along with my PPOR.

I am just wondering whether it's worth buying land within Victoria. I never just purchased land before. What are the caveats associated with it? Is there any rule that I have to build a house within certain number of years or can I just purchase and leave it?

Apart from that, what are the areas/hot spots for land purchase with future potential?

Any help will be much appreciated.

Thanks

 

This will depend on the estate requirements that you buy your land in. Some would ask you start building by a certain date, whilst others may not. Usually an empty land could become a dump yard especially in the new estate if houses around your block are built.

 

Lots of new estates now require to build within 2-3 years.
Some don’t allow to re-sell the land, so you can only buy and build after, even if you got a loan for the land and it’s yours.
Don’t trust too much I’d they tell you that your land would settle in 1 year, timeframes may vary considerably

 

Thanks all. Yes that time frame to build by, can probably be annoying.

Has anyone thought about rural land, outside metro Melbourne? What's the thought?

 

You should read growth plans for rural land. Go to the council's website and read all you can find about particular areas you're keen on. Generally, people buy rural land with 'spare' cash, sit on it for who knows how long and wait/apply for zoning changes. Some rural land is already earmarked for housing, prices will reflect that.

 

You could buy town blocks in a regional town or coastal/ holiday town

The old virgin blocks generally wont have any caveats

I think buying blocks is the quickest way to make money if you know how to time markets and on the flip side its the riskiest if you time it wrong and are stuck with no income and council rates , mowing

In my experience of watching growth in smaller towns experiencing a 2-3 year 'boom'
the vacant block prices can easily double whilst the house price only rises 50%

It makes sense if you realise that the price of a house in these towns is roughly the buuld cost less the block price

example.using rough prices of new estate style homes
so in year 1
block worth 150k
stock standard house worth 350-370 (house valued at 200-220k)

end of 'boom'
starter house price is now 570k because thats what interest rates dictate it to be
growth = 60%

block price is now 350k because it is 220k less than the house price
growth = 130%

cheers

 

Thanks @strongy1986 and @Westie

 

I regret buying a land. The interests paid while holding it vacant taken up so much of the gain.

 

long term hold? Yeah you need a decent income to support it.

 

Yeah, coz the market was down as you know. Original plan was to flip it straightaway. Bought in 2017 off the plan, settled in 2019, and recently sold it.