Landing right piece of dirt
THE great piece of Aussie dirt, all yours, well perhaps with a little help from a bank, but nevertheless all yours! Is land, the Australian classic, still the great investment opportunity it often has been?
It can be, but sign up for a random block without careful consideration and you might find you’re decades away from capital growth. So where should you start? Let’s look at location. You can play safe and buy local, where you know if a deal stacks up. Or, if you want to play away, be wary of “hot spots”. When a suburb has reached that status you might be a little late.
Perhaps go for the population growth areas. A recent Housing Industry Association report published its national top 20, which included the southwest of the ACT in first place with an astonishing 127.3 per cent annual growth rate, followed by Cranbourne East at 32 per cent.
The list was a real mixed bag, which is why it’s essential to do your research.
For example, seventh placed Pimpama in southeast Queensland is not in Brisbane and not on the Gold Coast, just in between. Number 10 was Yanchep in WA, a coastal area almost 60km north of Perth. The NT area of Palmerston South came fifth.
The proximity to a CBD is less important than it once was, compared to easy access to lifestyle amenities, affordability and good transport.
Also, large scale employers such as airports, hospitals and big retail centres are often away from the city centre.
I am a fan of the infill location, the new zoning created within an existing town or suburb boundary, where land is not at an endless supply.
If it is further out, ensure it is priced accordingly and has sufficient amenities to be attractive long term.
Note an area’s growth corridor long term; what could seem distant now, could be considered central in 20 years.
Get to know any location where you are considering investing, both online and in a physical sense.
Do not get hung up on size; blocks are shrinking. I know many of you don’t like this, but it’s driven by affordability and for many, smaller is better. People don’t want a big back yard anymore.
Unfortunately, town planners and councils don’t always get the mix right. There was once an obsession with rows of streets all having the 600sq m block, but now they all have 450sq m. To me this is thoughtless, lazy planning.
Try to seek a more creative subdivision with a mix of big, small. Melbourne’s growth corridors are seeing an increasing number of blocks with sizes of 300-400sq m.
My advice is to buy the size that suits the market you have selected. I see nothing wrong with small blocks in the right location and in the right estate plan, but in a rural area you want space.
Finally, a good investment often depends on who you purchased the block from and how. I would only buy a block of land directly from the developer or their appointed agents. This rule also applies for buying house and land packages.
Never buy via a property seminar, or a group of investors, unless they have charged you for their services upfront, or it has been disclosed how much in fees they have added. Nothing is for free. It might all be packaged up for you, but if you’re not prepared to select a block and house design and enjoy the process yourself, be prepared to pay for that privilege.
Land is and can be a solid investment; however it may be smaller in size and in a different location than you originally intended.
Andrew Winter is the host of on Lifestyle