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Burbank Blog

A few home truths about building a home and all that surrounds it.

Do you have a block of land that has not settled yet?

11/10/2021


If you have a block of land that hasn’t settled yet, you can still take advantage of Burbank’s Price Freeze Guarantee and get started on planning your dream home.
 
There are many benefits to beginning the building process while your land is waiting to settle – including saving yourself money. Who doesn’t love that?!
 
Start planning
 
Our Price Freeze Guarantee means your build base price is locked in, so you don’t need to worry about rising building costs. The price and availability of materials across the entire building industry has shifted due to the pandemic. Locking in a base price gives you reassurance for planning your budget, and perhaps some spending money to get the upgrades you’ve always wanted.
 
Once your land settles, you could be paying between $145 and $261* each week while you wait to build. That’s money you could be using, so don’t give it away!
 
If you’re using finance, you will need a building contract to finalise approval with your lender. This can be a lengthy process, with a lot of paperwork required. So, any head start you can give yourself will help ease the stress of getting everything done at once.
 
Tick off your to-do list
Land_Settlement_Blog_Image_2.jpg

While you’re waiting for your land to settle, there’s plenty to do.
 
You will need a conveyancer for the land transfer, so start looking around for someone who will make the process as smooth as possible and be all set to go once your land is ready to settle.
 
If you haven’t looked for a lender, get started now. Then you’ll know exactly what your budget is and how much you need to borrow to build your new home.
 
Some blocks will have covenants, encumbrances or developer guidelines attached to them. For example, you may have an easement on your block that means you can’t build a structure on part of it. Or you may need to stick to a height limit. It’s important to know about all this before you start building as you may need to factor it into your budget. We can help you with this when you have your appointment if you are still unsure.
 
Compare the pair
 
If you’re still unsure if choosing your home design prior to land settlement is for you, have a look at two of our customers, Joe and Dale.
 
Joe and Dale both have land waiting to settle. Joe found his dream home design, paid his builder deposit and started planning. While Dale waited for his land to settle before getting started.
 

  Joe-customer.jpg Dale-customer.jpg
Price of home today vs in 10 months Deposits on today’s prices ($9,500 saving) Deposits on prices in 10 months’ time will include the inflation of material and labour costs. While impossible to predict prices in the future – Australia’s average inflation rate is currently at 3.8% a year, so on a $300k house Dale can expect to pay $9,500 more in 10 months.
Getting to site Contracts and finance were sorted before Joe’s land was ready, so he had no delays to get to site. Getting to site can take anywhere from 2-6 months depending on a number of external factors (council approvals, bank delays etc).
Holding costs on land ($300K) waiting for site start Minimal
($2100 interest savings)
Best case scenario and it takes an additional 3 months – Dale has now paid $2100 in interest only payments on the land.
Living expenses while waiting Minimal
(approx. $6,000 savings in rent payments)
Let’s approximate $500/week rent – that would be $6,000 in rent payments on Dale’s existing home while he waits.

So, if you want to save money on your build (surely that’s everybody!), give one of our sales consultants a call and we can help you get started.
 
 
*Based on a 3% interest rate and interest only period, with $10 a month in fees paid.