Building their own home is a dream for many people, but it can be a more intimidating prospect than simply buying an existing house. One of the first and most challenging steps is to find the right plot of land. Unfortunately, this task does not end when you find vacant land (a difficult enough task in many Australian locations). Before buying the parcel of land, it is crucial to understand the relative ease or difficulty involved in building on this land, as this can have a significant impact on the cost of the build.
Land Zoning
Land zoning is a process in which state governments and local councils determine the best use for a plot of land. Although the terminology given to different zones varies across Australia, in most jurisdictions land is zoned into broad categories of “residential”, “commercial”, “agricultural/farming”, “industrial”, and “public”.
Most home builders will buy land zoned residential. However, even within this zoning it is important to take care and pay attention to the levels of density allowed (such as “high density” zoning, which allows a parcel of land to be developed for multiple dwellings). Someone who is looking to build a family home in a quiet residential area should consider carefully before buying a plot of land where all the surrounding parcels could be used for high rise apartments.
Infrastructure
Particularly in new estates, existing and planned infrastructure is a critical issue when choosing a building plot. In established areas, you can easily identify existing infrastructure by assessing how well serviced the land is with shops, medical services, schools and entertainment. You should look at whether it is necessary to travel to access these services, the availability of public transport, and the ease or difficulty of the commute. For instance, if there is only one exit road out of the suburb, it may become a carpark every morning and afternoon.
In a new build estate, you can get an idea of the future infrastructure by looking at the plans provided by the developer. However, a developer’s plans for future infrastructure for an area are usually subject to “commercial viability”. Unless the developer is contractually obligated to deliver on a promise, you should assume there is a chance that the infrastructure will not be delivered.
Ease of Building
Even if a block of land is zoned for residential building, it may not be an easy block to build on. If the land is very steep or uneven, or the soil is unstable, reactive or very rocky, the cost of building may make it unfeasible.
The shape of the land may also restrict the type of building that you can construct. If you want to build a particular design of home, it may be worth having an inspection by the builder to find out whether the building is possible based on the size, shape and slope of the block.
The ease (and cost) of building is also influenced by whether the property already has utilities on site. This can include water, sewerage, gas, and electricity, as well as phone and internet lines. If these services and utilities are not present, bringing them to site can mean a few extra thousand dollars, or can be hugely expensive if the nearest service is a long distance from the plot. In some areas, it is not possible to access services (such as town sewerage and water) so it will be necessary to factor in the price of building private services (such as a septic plant and water collection).
Bushfire and Flood Zones
Bushfire and flooding are realities of living in many areas of Australia. Some properties are particularly vulnerable to impact from these natural disasters. Before committing to the purchase of property, it is important to check the risk of bushfire attack.
A Bushfire Attack Level (BAL) measures the severity of a building’s potential exposure to ember attack, radiant heat and direct flame contact. It is measured in increments of radiant heat (expressed in kilowatts/m2). The higher the number, the higher the risk of bushfire attack at a particular property. A high BAL does not mean that the property cannot be built on, but it will almost certainly increase the cost of building (as you will need to take greater precautions and use fire-resistant materials in the build). A high BAL may also increase the cost to insure the property.
Floods can be as destructive a force as fire. Before committing to a property, a buyer should check local state and council records to see if the property has been subject to historical flooding. Even if there has been flooding, the plot may still be suitable to build on, as there may be parts of the land which inundate while others stay dry. In that case, you may wish to design a high set home.
As with fire danger, the risk of flooding may increase the cost to insure the property (or may even make it impossible to obtain insurance). You may want to speak to your insurer before you make an offer on a block of land with a history of flooding.
Easements and Covenants
A block of land may appear perfect but can have significant, but invisible, issues in the form of an easement or covenant. These may not make the property undesirable as a building site, but it is very important to know that these easements exist before purchasing.
An easement gives someone (other than the owner) the right to use a defined portion of a piece of land for a specified purpose. For instance, a neighbour may have the right to drive across the corner of a plot to gain access to their own property. An easement can make it difficult to build on a plot or may stop the homeowner from installing fencing or other landscaping.
A covenant is a private agreement that imposes obligations on the landowner regarding the land use. For instance, a developer may include a covenant into the contract for the sale of land that imposes a particular standard for the construction of homes (such as all homes must be brick and tile or over a certain size).
These are just some of the issues you should consider when assessing the suitability of land that you propose building on. It is important to conduct your due diligence and get advice from building and other property professionals to ensure your dreams of building your new home, and within budget, can be fulfilled.
If you need assistance with a conveyancing matter (either buying or selling) or would like more information, please contact us on 03 9726 9569 or email [email protected].