Australia's cheapest blocks of land to build a house

It sounds like living the dream – find a cheap country block, build a sweet little home and kick back and watch the world go by. Even if it’s only the once-in-a-while visit as holiday home.

But how cheap is “cheap”, where are these blocks, what kind of buyers look for these properties – and what issues come with that kind of undertaking, and financing it?

Mortgage Choice chief executive Susan Mitchell said while there was no particular difference in the way an application to buy a rural or regional block would be considered compared with one in the city, there were fewer willing to lend for the purchase of rural land.

“What needs to be specifically considered is the assessment of the home loan applicant,” she said. “If the property is owner-occupied, the borrower would be living in the house to be built, and would in most cases need to prove they are working in the area.”

Ms Mitchell said a lender would not approve a loan for someone in an affordable part of the country with the idea of them gaining employment there – they’d have to already have work in the area. Zoning could also be an issue, with land classified as rural residential able to be mortgaged but rural land designated for farming would only qualify for a commercial loan.

“Another consideration will be whether the property is connected to services,” she said. “Lenders require proof that there are services connected to the property such as supply of water, connection to power and road access to the property. “

Home Loan Experts credit manager construction loan valuations were done on a “on-completion” basis, which included the land value and the tender price.

The lender would request a signed, fixed, priced building contract with plans and specifications before formally approving the loan, and funds would be released on a payment schedule, depending on construction progress, she said.

What can you buy for less than $10,000?

There are, however, properties so cheap that financing for the land itself might not be necessary. One of the most affordable blocks in Australia is 180 Sutherland Street – an 1760-square-metre piece of land in WA’s wheatbelt in the small town of Trayning, a little under three hours’ drive north-east from Perth.

Priced at $6000 with a 25 per cent reduction, and close to the pool and bowling club, the block had attracted a lot of interest, according to agent Peter Sippe, of Elders.

The Department of Housing block would need some earthworks done, he added, with some water coming through it.

About an hour south in Tammin, a 1012-square-metre lot is for sale at 9 Uppill Street for $7000, and nearby 5 Ridley Street is priced at $9500. 

The agent for both, Mike Bawden, of York Estate Agents, said he had only had the properties at that price for a little while, and had one offer already.

While the two-hour trip from Perth might discourage buyers, he described the blocks as “having nice big trees, rural outlook and right in the town centre”.

Uppill Street had a time limit of two years to build, he added, but it wasn’t generally enforced.

Farther south, in Dumbleyung, about three hours south-east of Perth, a 1196-square-metre block at 77 Harvey Street is advertised with a price from $7950.  Records show the level block, with power connected, last sold for $25,000 in 2012.

$10,000 to $20,000

For those dreaming of cheap land by near the sea, there are options in South Australia with a 1085-square-metre block relatively close to the water in Port Germein, South Australia, listed at $15,000.

Agent Sean Manfield, of Wardle Co Real Estate, said he thought the eventual buyer would build on the land because the coastal location would make it a good spot for a weekend getaway.

About four hours’ drive farther west, in Sheringa, buyers could pick up a 1012-square metre block on South West Street for $18,000. Agent Elaine Seal, of Elders Eyre Peninsula, said people generally bought blocks of that nature to initially build on, but things didn’t always work out that way.

“There is a lot of underground water at Sheringa, which is a bonus,” she said, although the quantity of limestone in the ground made it harder to dig, and while the property was remote relatively remote the beach wasn’t very far away.

“It certainly has potential for people to build a house and live there,” she explained, adding that the entire Eyre Peninsula market had been pretty slow.

“It’s a nice place to live if you like the beach and fishing,” she said. “It’s a great little place to retire.”

Inland, in the town of Brim in Victoria — famous for its silo artworks — a 2000-square-metre block on 55-57 Swan Street is listed for sale at $15,000.

About 450 kilometres west of Sydney, a 1000-square-metre level block with a building entitlement at 6 Ariah Street, Ariah Park, is listed for $16,000.

Agent Terry O’Rafferty, of MF Brennan & Co Real Estate Temora, said it had power up to the boundary, but with good-quality houses selling in the area for $150,000, it was more likely that it would sell to someone with a small amount of money they wanted to invest.

About half-an-hour’s drive away in Ardlethan,  a 948-square-metre village-zoned block at 1 Rowston Street listed at an even $10,000 has just sold.

Agent Kelly Whitton, of Gersbach Firman Real Estate, said she’d had at least 20 inquiries on the three cheap blocks on her books – the other two being 45 Bygoo Street priced at $15,000 and 18-20 Pine Street Matong listed at $10,000.

She said buyers looking at such blocks were more likely to keep them as an investment, although 1 Rowston Street was ready to build on.

It’s a similar story at Collarenebri on the Barwon River where three 1042-square-metre building blocks on Barwon Street listed at $10,000 each, or all three for $27,000, had wound up selling privately through a rent-to-buy arrangement.

“They were very cheap,” said agent Glen Ryan, of Bruce & Lynn State-Wide Realty. “At that price you’d think they would have sold for cash.”

He said there had been plenty of interest in the properties, but the difficulties of building in an isolated country town tended to dissuade buyers looking to put their dream home on a cheap block.

“They do the sums. and building a brand new house on one of those blocks would be over-capitalising,” he explained.

Above $20,000

In Queensland, there’s quite a bit on offer on or about $20,000 – for example, Lot 15 McKay Street, Mount Perry,  about an hour-and-a-half south-west of Bundaberg, where buyers get 1182 square metres with a view.

“You might get the grey nomads – it’s a fairly cheap place to live, Mount Perry,” said listing agent Michael Dempsey, of Michaels Real Estate. “It’s a lovely little town.”

A quarter-acre block in Horton, 45 minutes south of Bundaburg, is listed for sale at $35,000, with the agent describing it as a bargain.

Meanwhile, for keen anglers, there are a few options in central Tasmania – for example, a 1972-square-metre block is on offer about two minutes from Lake Crescent in Interlaken for $36,000.

Properties at that price point were rare, said agent Andrew Hills, of PRDnationwide Hobart, because the market had completely changed.

He said while the relatively remote property hadn’t generated a huge amount of interest, it could appeal to someone who enjoyed trout fishing on the lakes.

“Probably not building a house, but making the site as a weekender,” he said. “Holiday shack or caravan, that kind of place.”

About an hour’s drive away, a 3926-square-metre block is available on Arthurs Lake Road, Wilburville, priced at $30,000.

Agent Gaylene Potter, of 42 Degrees, said buyers of similar blocks used them both as country getaways, and also to build on – although demand for land had been fairly quiet of late, with more people looking for existing houses.