Small Lots, Small Budget

Written By Louise Barton

The Great Australian Dream was once about owning a large block of land, with a modest 3 bedroom house, white picket fence and manicured gardens for the kids to play in. Many of the younger generations of today are of a somewhat similar mindset, wanting to build a big home for themselves, whilst future planning it as their ‘forever home’, in a decent location.

[Ok, perhaps a bit of a generalisation, but nevertheless, a fairly common conversation we have.]

Their first thought is to move out of the rental market, which has steadily decreased in supply since June 2019 (REIWA, Perth Metro Snapshot), and own their own home. However, when a finance broker delivers the borrowing capacity of what sounds like a big number, the reality is that a budget of anything less than $700k won’t buy you the Taj Mahal you’re dreaming of on a 450sqm piece of land. I wish we had better news for where Perth’s market currently sits.

But when we have a lower budget to work with, we need to change our mindset from wanting a big house and a big block, to something more achievable, within budget, placing us in the best financial position possible to bring future value. There is a more viable approach that gets you into the market at today’s price, and saves you the 5 Year Regret Period** - - to build a great quality, fully finished home, but on a smaller block.

Benefits of Lots of 300sqm and Under

Small lots, with an area of 300sqm or less, can provide some of the most underrated and affordable options. Current packages for these lots generally range from the $600k-$690k mark, depending upon location. The most common dimensions of a 300sqm block are a 15m frontage by 20m length, or 10m frontage by 30m length; the latter often creating a rear loaded garage design (more on this in an upcoming blog).

With the right design, these blocks can easily accommodate a 4 bedroom home, or 3 bedroom plus theatre or home office, and an alfresco for entertaining. And if you have saved enough of your budget to put into your home, value can be added by increasing bedroom sizes, or making extra space in your open plan Kitchen, Living and Dining, and so on. This maximises use of your block, and gives you more ‘bang for your buck’.

The biggest benefit of a smaller block is spending less of your budget on the cost of the land itself, allowing you to put more into your home, from the layout and design, to the finishes and inclusions during construction ie. hobless showers, stone benchtops, wall painting, and even air conditioning. Not to mention having the money to spend on your growing ‘To Do List’ once you move into your home, which includes the somewhat expensive task of landscaping.

Food For Thought

Of the people we speak to who are looking at smaller home & land packages and have worked through their list of priorities, realise one of the following:

  • To not spend their whole wage on paying the bills and mortgage.

  • Big yards are costly to landscape and maintain for years to come.

  • Small plunge pools are sufficient - that’s what the beach is for.

  • Living close to family and friends takes precedence over a big home.

  • Time to build some equity.

  • A theatre for us is a junk room we don’t need.

The first things you should be asking yourself when building your next home?

  • Why do I want to build a home?

  • What is my ultimate goal for this home?

  • How do I live my day to day life and what are my priorities?

  • How much of my wage do I realistically want to pay for this house each week, irrespective of what the bank says I can borrow?

References & Glossary

Louise Barton