In addition to traditional investment, Land & House Package is another popular investment method. Literally speaking, it is very simple to buy land and villas, but how is this different from traditional investment types? What are the ways of land development?
First, talk about land division and development. There are two types of land division development. The first is to divide a piece of land and build multiple independent villas. As long as the minimum land area requirements of each city hall are met, the products on the land can be designed as independent Title villas, the prerequisite is to contribute a path to the government. This type of project has a relatively large land area requirement, at least more than 5000-10000m2. The development model is the same as the development of a townhouse. The difference is that the land nature of this type of project is often not Residential Zone, and it is often Special Use. The change of the nature of Zone or other land will directly increase the difficulty of loans.
The most critical factor in determining the purchase price of land is the geographical location and the size of the living space that can be built on this land. The appreciation of independent land villas is not the house itself, but the appreciation of the land. When it comes to price increases, a good location determines 80% of the price increase, while houses are originally the remaining 20%. Also note that prices vary widely in different districts and streets.
The second type is House and Land Package, that is, houses and land are bundled and sold together, which is also a major way to buy off-plan houses on the market.
The development and selection of this product is generally in a satellite city more than 30 kilometers away from the city center. If it is in the southeast of the east zone, it is usually in the range of 40 kilometers later. The development of this product requires larger land for land division and the requirements of “three links and one leveling”. Many times developers will choose to cooperate with construction companies to develop. This type of development cost is not as high as it actually seems, but the cycle will be longer, and very large projects will be developed in phases. It has many development skills for land purchase and building, and it is very financially conscious. It is also the project with the most so-called “routines”.
No matter in which country you are developing, cash flow is king. Before development, you must remember to make an accurate budget and be familiar with Australia’s fees. This is also often overlooked by Chinese developers, otherwise there will be a risk that the capital chain will break. . Many projects that have lost money are overconfident and do not actually understand the overseas investors in the Melbourne market.
Traditional development
Apartment Development APARTMENTS
HIGH-RISE APARTMENTS HIGH-RISE APARTMENTS High-density apartment development is generally located in the city center, near the city, or close to the school, transportation, shopping center location. Generally, these areas have a high population density and high land prices. High-density apartments can be regarded as the most difficult development projects, requiring a lot of capital and careful consideration of the selection of third-party institutions including planners, designers, architects, marketing teams, etc.
Medium Density Apartments MEDIUM-DENSITY APARTMENTS Medium density apartment development projects are usually between 5-11 storeys, with a scale of about 100 units. The location is 10km away from the city center.
Low-density apartments LOW-DENSITY APARTMENTS Low-density apartment development is usually located in the suburban area within 15km from the Melbourne city center. The size of this type of apartment is generally between 10-30 units. More and more locals are turning to exquisite low-density apartments in inner and suburbs for the convenience of living and working, but they cannot afford the expensive housing prices of villas.
Townhouse development TOWNHOUSE Townhouse development is generally the development of a higher-density multi-unit townhouse project after a single or several independent old houses on the ground are overturned. Townhouses have been favored by more and more home buyers due to their high cost performance, especially for new immigrants overseas, local double-income young couples and elderly couples who are replacing houses.
Small-scale project development The scale of small-scale townhouse project development is between 2-10 sets, which is usually the first choice for new entry-level developers, because such products are just in need in the market, and the development cycle is the shortest (1 year and a half to two years), Costs and risks are also the lowest.
Large-scale project development Large-scale townhouse project development is often favored by experienced medium- and large-scale developers (more than 5 years). Although its capital needs are relatively large, the risks are low and the profits are considerable. The total sales of this type of project are generally between 20 million and 50 million.
When negotiating land purchase, many skills are required. For example, if the delivery time can be extended, it can help developers to reduce the cash flow cycle, which is very beneficial to the entire project. The development and management of townhouse projects are also GWCP’s strengths. The return on development for all projects of the same type that we participate in has far exceeded investor expectations.
What is a land + villa combination?
The House and Land Package, as the name implies, is to package and sell the house and land together. It is not only popular among Chinese investors, but also a major way to buy off-plan housing in the Australian property market. For most buyers, building a house is a very unfamiliar field, and needs to deal with designers, builders, plumbers and other aspects. Building a house also involves planning approval, design, construction approval, construction, construction, etc. This aspect is too complicated, so the seller will provide packaging services to facilitate buyers. The seller provides services such as House& Land Package to facilitate buyers. The first thing buyers need to do is to choose the plot and the villa to be built. It can be said that this is a win-win option. The House and Land Package project is generally a joint project launched by both land holders and builders.
In Australia, the land + villa combination usually refers to buyers buying land and building a brand new villa. But buyers will be involved in signing 2 different contracts instead of 1. In other words, the buyer usually signs a land purchase contract with the developer, and then signs a house construction contract with the builder. These two contracts are completely independent.
Advantage
Low initial investment
The purchase form of the land + villa combination requires less initial investment, and only needs to pay the amount of land in the early stage. For building a house, the fees are paid one by one according to the progress of the project, and the buyer can have sufficient time to prepare the funds.
Villa design is more rational
You can flexibly choose your preferred apartment type and decoration standard when you choose your own place to build a house. Buying an existing house is usually the developer who directly sets the apartment type and standard for the owner.
Tax advantage
If your property is used for investment, income tax issues will definitely be considered. The depreciation of houses can be recorded as expenses to achieve the purpose of tax reduction. Compared with second-hand houses, the depreciation cost of newly built houses as investment houses is higher, and the fixed supporting facilities and household appliances inside can be depreciated, which can be reduced. Go for more taxes.
