On the face of it, buying bare land might seem a far simpler task than purchasing a home.
In reality, though, there are often just as many considerations and potential traps for the unwary. Buying a property tends to be an emotional experience for most of us, and even some of the fundamentals can get overlooked in the heat of the moment.

Location, location, location

Your budget will clearly dictate where you can afford to buy. However, when considering the location, don’t underestimate the following factors:

  1. Distance to the town centre. While it seems like the obvious, often people don’t appreciate just how transport costs can add up over time. Consider carefully your lifestyle, and calculate – both in terms of time and money – just what you’ll be taking on. If you’re within walking distance of bars and restaurants, you don’t need to worry about taxi fares if you have a few. Older folk usually prefer to live somewhere within a short flat walk to everything they need.
  2. Distance to schools. Being closer to schools will likely also save on costs for families … and allow you to sleep in longer in the mornings! You can also potentially increase the on-sale value if you’re within walking distance of a good school. Also, check out the route to school, and keep in mind considerations like busy roads that children need to cross.

Practical checks and balances

How steep is the slope where you want to build? Having to excavate a steep slope can add considerably to your build cost. It can also mean that you need to add more than one storey, which is more expensive than a single-level building. A steep slope can also have water running down the site, while a completely flat site might bring water ponding headaches.

Is the ground stable, or is there fill or unstable soil that requires extra foundations, reinforcing or piling? A geotechnical engineer’s assessment of the land might be in order.

How far away from the street will your house be? People tend to underestimate the cost of building a driveway, and the price can be eye-watering when the metres start adding up. You also need to consider whether the driveway will be on solid ground. If it’s on unstable ground, the surface could break up, or the driveway might sink.

Are there trees on the section that will need to be removed? Is there foliage that will block sun to the house or impede that million dollar view? Bear in mind tree removal isn’t always easy, and often doesn’t come cheap.

If you’re considering a corner section, think about privacy and setback lines. With a corner section there will be setback lines on two boundaries, which could be bigger than usual.

Is it a sunny site? A sunny home will be less expensive to heat. Do you prefer morning sun or evening sun?

Is the site exposed to the wind?

Is there a creek or waterway next to or within the section? The property could flood if there is, requiring higher piles or fill.

Will views from the section be blocked when neighbours build?

Legal considerations

A land information memorandum (LIM) report from Council will answer some of the pressing questions.

You also need to consider the zoning for the section, and what restrictions there are in the district plan in terms of, for example, height restrictions, site coverage, setbacks from boundaries.

Check to see that the survey pegs are in place, so you know the exact location of those boundaries. The standard agreement for sale and purchase does require the vendor to peg the boundaries before settlement if bare land is involved, but you’ll want to know the exact boundaries before you commit to the purchase. That way, you can make sure that you’re able to build where you want to after taking into account the setbacks, which can only be accurately assessed against the actual boundaries.

Most developers now impose land covenants when subdividing a property. These are restrictions on what you can build on the property, and are registered on the title. They might included factors such as requiring a minimum floor area of the building, minimum build value, height limits, specifying the type of materials that can be used, and the number of buildings allowed on the site.

Do any easements on the title reduce the usable area of the property? A right of way may effectively reduce the functional size of the section or the building platform on it. There might be public or private drains crossing the section which prevent you from building on that part of your section.

Is the section a cross-lease section or is it on a freehold title? A cross-lease section will contain restrictions and mean that you will need to obtain consent of the other cross-lease owners.

Giving proper thought to the big picture before embarking on the hunt for your dream section will reduce the perils of signing up for a lemon and budget blow-outs, making the process far less stressful and upping your chance of finding the perfect canvas for your new home.

Last updated 23 November 2017

Residential property Buying residential property