Land­ing right piece of dirt

Herald Sun - Property - - OPINION -

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

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