Thinking about settling down in Newcastle? Whether you’re a first-time homebuyer embarking on an exciting new chapter or an experienced investor looking to expand your portfolio, you have several options. You can rent a home, buy an established property or buy a block of land to build on in the future.
Or maybe house and land packages have caught your eye. They’re a modern, convenient and simple way to build your dream house. But are they really worth it?
Let’s look at exactly what a house and land package is, the different types, the pros and cons and the best Newcastle suburbs to find house and land packages right now.
What Is a House and Land Package?
A house and land package is when a block of land and a home design are sold together as part of one process. Developers or builders typically offer it, and there are 2 main types: turnkey or standard.
A turnkey package offers a brand-new home, with everything from the flooring and cabinetry to the outdoor spaces finished, so all you have to do is ‘turn the key’ and move in. It’s ideal for those who want a brand-new home without the hassle of decision-making or additional work.
A standard package offers more flexibility. You purchase the land first and then choose a home design and customise it to your specific needs and preferences. This option is more popular with homeowners who want more control over the look and feel of their new home.
Why Are House-and-Land Packages Popular in Newcastle?
As Newcastle’s population booms, it has become harder to find homes to buy and land on which to build. However, recent land releases at Thornton, Cameron Park, Fletcher, and others under the NSW Government’s $6.6 billion Building Homes for NSW program are helping ease housing pressure.
Combined with government incentives such as the First Home Buyer Assistance Scheme, house-and-land packages have become an affordable way to own your own home quickly. This is especially so when you consider that the median price of a Newcastle house is well over $900,000, while many house-and-land packages are considerably less, at around $700,000.
Who Are House-and-Land Packages For?
House and land packages are a smart, simple and affordable option for first homebuyers and investors alike.
For first-time homeowners, they offer a simpler way to own a brand-new home. Compared with buying an existing home, especially one requiring structural work or renovations, house-and-land packages can mean fewer surprises and more cost savings.
For investors, these packages also represent a solid investment. With Newcastle’s strong rental market, house and land packages offer a good rental yield and capital growth potential.
The Pros of Buying a House and Land Package
There are many advantages to buying a house-and-land package over alternatives such as an existing home or a block of land. Here are a few key benefits:
Stamp duty savings. In NSW, you pay stamp duty only on the land component, not the full house-and-land value, saving you thousands compared to buying an existing home. The NSW First Home Buyers Assistance Scheme also provides stamp duty concessions or waives it altogether for eligible first-time buyers.
Fixed prices mean no unexpected costs. Many house-and-land packages offer a new home at a fixed price, making budgeting easier. With many builders also offering the option to customise home designs, you can still have your dream home without the stress of a custom build and construction loan. It’s also better than buying an existing home and living through renovations to add extra space or change the floor plan, because this can easily lead to unexpected costs.
There’s the potential for capital growth. Whether you’re an owner-occupier or an investor, a newly built home offers a better long-term investment, with less depreciation over time than an existing house that also requires a lot of maintenance.
Enjoy modern features, home warranties and less maintenance. Newer homes come with modern layouts and the latest fixtures. They also adhere to higher energy-efficiency standards, such as a minimum 7-star thermal rating. That means lower bills and less maintenance.
The Cons to Be Aware Of
While house and land packages offer many benefits, there are also some potential drawbacks to be aware of:
Location trade-offs. House and land packages are typically offered in newly developed areas, so your Newcastle house may be further from the CBD than existing homes. This may mean a longer commute to work or less interest among city-focused renters.
There’s limited design flexibility. Although customisation is available, these additions can add to the overall cost, or you may be limited in the number of changes you can make. Some due diligence before signing a contract ensures that you can have the floor plan of your dreams minus the big price tag.
Beware of hidden costs. Upgrades and variations can add up fast. Additionally, weather delays or material shortages can affect your build timeline. Be sure to ask your builder all the relevant questions and read the fine print so you have peace of mind about exactly what’s included.
Waiting to move in. While it can take as little as 4-6 months to build a 3-bedroom home on a flat block of land, if you choose a standard house-and-land package and wait for the home to be built, you will need extra money in your budget to cover rental expenses during this time.
Newcastle Suburbs with Great House and Land Deals
If you’re looking for a house-and-land package in Newcastle and the Hunter Valley, here are our top suburbs for great deals.
Fletcher
This outer western suburb of Newcastle is just 16km from the CBD and, with many new builds, is very family-friendly. It has a small shopping centre with essential amenities and is close to parks and reserves.
Chisholm
Chisholm is a growing suburb that offers a strong sense of community and a welcoming atmosphere for newcomers. It has childcare centres, schools and access to many leisure facilities suited to families.
Medowie
Located roughly 35km from Newcastle, fast-growing Medowie is surrounded by bushland and conservation areas, so it’s an ideal place to live for nature lovers. Close to the airport and RAAF base, it’s also a local employment hub.
Cameron Park
Situated in beautiful Lake Macquarie, Cameron Park is a prime location for those commuting to Newcastle or Sydney. With its many parks and recreational facilities, it appeals to residents who love to live an outdoor lifestyle.
Thornton
A bustling suburb of Maitland, Thornton is situated off the New England Highway, close to the M1 entrance. Less than a 30-minute drive to Newcastle, it’s a quiet haven for families, with many great schools nearby.
Comparing House and Land Packages vs Established Homes
If you’re deciding between buying an established home and a house-and-land package, here’s how they compare.
Cost factors
The median house price in Newcastle is currently around $900,000 for an established home. In contrast, house-and-land packages can be significantly less expensive, starting at around $700,000 for a 3- or 4-bedroom, 2-bathroom home.
A new home also has greater potential for long-term capital growth and is an attractive option for tenants if you’re thinking of renting it out. A brand-new home won’t require as much maintenance as an established home, and, as new homes are more energy-efficient, they cost less to run.
Move-in time
If speed is a priority, you can’t beat something that’s already built, ready and waiting for you. However, turnkey packages also offer a quick move-in without additional renovation headaches.
Another thing to consider is that building a home might not take as long as you think. In some cases, a brand-new home can be built in as little as 4 months.
Resale value and depreciation
If you are thinking of selling within 3-5 years, an established home in a sought-after suburb may be a better investment for you.
House and land packages are a better long-term investment, with the land itself appreciating over time. Older homes in established suburbs normally have higher land values and, as they are close to infrastructure such as schools and transport, are in high demand among buyers.
Are House and Land Packages Right for You?
If you’re considering investing in a house-and-land package in Newcastle or the Hunter Valley, Vision Homes is the builder for you. We’re dedicated to providing personalised support for your home-building journey, and as locals, we’re passionate about housing solutions in Newcastle and the surrounding areas.
Visit our website to see our current house and land packages, read more about why choosing a local builder is better, or find out more about where we build in Newcastle and the Hunter Valley.
Frequently Asked Questions
What are the disadvantages of a house-and-land package?
Some disadvantages of house and land packages include limited locations, a small range of designs and hidden costs. It’s important to have your contract checked by a legal professional before you sign it so that you can make an informed decision.
Is Newcastle a good place to invest in property?
For those seeking affordable housing and growth potential, Newcastle is a great place to invest in property.
Is it better to buy the land first, or to buy it as a package?
Buying the land first, before knowing what type of house you can build on it, can be significantly more expensive. House and land packages remove that uncertainty by handling approvals.
Is it worth buying land next to your house?
It may be worth buying land next to your house if you want to guard against development and increase your property value.