If you haven’t bought a block of land before, one of the most important things you need to know is the difference between purchasing a ‘registered’ and an ‘unregistered’ lot.
Put simply, registered land is ready to build on. Civil construction works have been completed, the subdivision has been approved by the local council and the plan of subdivision has been registered by the Land Titles Office. In a nutshell, the land has been officially subdivided into individual lots and you can start construction once you settle – subject to council approval.
Unregistered land is at the other end of the scale. Often known as buying ‘off the plan’, purchasing an unregistered block means the Development Application (DA) for your subdivision has been approved, but the individual lots do not have certificates of title and buyers cannot begin to build until these are issued.
It’s quite common for land to go to market unregistered, particularly in popular areas where vacant lots are at a premium. One such release is Wirraway at Thornton, where Stage 5 of the popular community has recently gone to market as unregistered lots.
Wirraway Land Sales Manager Sam Budden said it was almost standard for land to be sold unregistered and it could often be advantageous for the buyer.
‘Buying off the plan has a number of advantages, especially when you aren’t in a huge hurry to build and are happy in the immediate future just to get a foot on to the property ladder.
‘One advantage of an unregistered lot is you can buy a block of land in the area you want to live in at today’s prices, but without having to pay for it until well into the future. This really gives you the opportunity to lock in a price and get really organised with finances before your build begins.’
Another big advantage of buying unregistered land is the opportunity for capital growth in the period between paying your initial deposit and settlement.
‘When you buy land somewhere like Thornton, which experienced double-digit property growth last financial year, and is on a continuing trajectory as one of Australia’s fastest growing districts outside Sydney, you’ll usually benefit from capital growth in the meantime,’ Mr Budden said.
Buying an unregistered lot is not complicated, but you do need to do your homework. Consider these things:
- The date the land is expected to be registered. As you’d expect, this can change over time as the process moves forward so it’s really important to find out the ‘sunset clause’ date in your contract. This ‘sunset clause’ date is set by the developer and can be considered as your worst-case scenario settlement date, should there be delays in construction due to weather, for example. This ‘sunset clause’ also protects you as a buyer as it gives you the ability to rescind the contract without penalty should the developer take longer to register the land than expected. You will need to factor this in to your planning.
- If you want to move forward with a new home tender, you’ll also need to check your new home tender expiry date – it needs to accommodate the land registration date, otherwise the price will increase.
- Site costs and soil conditions. Of course, no one can see exactly what may come up during a build, but do your research and try to find out what similar builds in your area have been faced with and the costs that have been incurred. You should factor in a contingency in your budget for unforeseen site costs.
With Stage 5 of Wirraway now on the market, Mr Budden said the unregistered lots were proving extremely popular with buyers keen to build in the popular area and secure land at today’s prices in a fiercely competitive market.
‘The process of securing a lot in what is expected to be the last stage of Wirraway is a $1,000 holding deposit followed by the balance deposit of $4,000 on exchange,’ he said.
‘Settlement occurs 14 days from the registration of the title, which we expect to be in the first half of 2019.’
To find out more about living at Wirraway, register online now or call our friendly team on 1800 891 958.
Disclaimer: Defence Housing Australia (DHA) and Robinson do not guarantee, warrant or represent that the information contained in this advertising and marketing material is free from errors or omissions. Any interested parties should make their own enquiries, seek expert advice and review the contract terms.