Buying a block of land

Hi Guys,
Just had a thought I wanted to get clarified. What are the possibilities or pros/cons of blocking a land (by paying a lump sum deposit) whose titling will take around six months to a year and sitting on it for a year or two (maybe more) and selling the land at the appreciated price, while I pay the land developer the original price that I had booked it for? Is this possible and worth investing in rather than keeping it in a bank at a fixed interest rate?

Apologies if this sounds stupid, I'm just thinking out aloud.

Most developers will not allow this to happen. Contracts are made for you to build a house on. If you don't within a timeframe you are forced to sell it back to the developer.

Hi Eve,
Thanks for the reply. Will this be the same case if the seller is private? (However I assume this is highly unlikely that a private seller may want to sell land unless he is in desparate need of money).

On a sidenote, I remember my colleague who is building in point Cook boasting about how his land is massively appreciated in that his neighbour who has the same size of land and was selling it off within a year for 70K more than the original price. What you are saying may probably varies with different land developers, not sure.


I will try contacting my land developer to see if this is the case.

The only estate I know of in our area which doesnt have a time frame to build is Rennaisance Rise

My land contract stated that we had to build within two years but we could also not sell the land for two years.. so two years for it to appreciate would be very benificial.. my went up $40,000 in about a year.. that's even before the land was titled! Sad for me because I decided to build .. I was too impatient living in a rental!

I dont know how strict they are about building within certain times... There's blocks near us that settled well over a year ago and are yet to have any building work... some are even back on the market...

Which estate are you in dirtbag?

Hey Erin, I'm in Plenty River Estate .

cool where about's are you looking at buying another block?

We had a 12 month title wait, then had I think 18 months before we needed to start to build. Great benefits if you can buy well as it becomes equity with the bank when it goes up. Then we had a friend also, put down the deposit 10% nothing more to pay for 12 months until title, block went up by about $40k in value plus first home owners grant....didn't need mortgage insurance also as a result.

We couldn't however sell the land for profit, had to sell it back to the developer but could have built and sold.

So If you are selling back to the developer after a year, Can't you sell it back for the appreciated price?

@Erin - I'm not planning to invest as such yet, I don't have any spare change left . My post was originally a thought about putting my extra savings in blocking land for a year and selling it at the appreciated price instead of putting the same in my offset account. Bah! Nevermind, I'll jsut put it in the offset for now.

That's the catch I'm quite sure you have to sell for the purchase price. We were thinking of doing the same thing back then. If you stick a 3 or 4brdm on it and sell no issue.

They usually let you apply for an extension up to a certain amount of time - we extended ours from 12 months to 18months and our neighbours extended their til 24months.

If you sell without building, there's usually a clause in the contract, designed to discourage people from speculating. Often you have to sell back to the developer with some kind of financial penalty. Then they get to resell the block at a higher price and impose the same conditions on the new buyer (re building within a certain time and other requirements).

I'd have to go read our contract, but I remember the conditions for resale were pretty harsh. Best to check contract conditions before getting too excited about potential profits.

Buy a block from me!!

None of our estates have time frames to start building within or clauses stating you have to sell the block back to the developer. A lot of these clauses can be gotten around. We often sell blocks which state they have to be sold back to the developer.

I sell Mitchells Run, The Ridge, Panorama, The Outlook at Promenade (all in Doreen) Watercolour Views in Mernda and Plenty River Views in Whittlesea.