Australian Land Banking Services

Why invest in Land Banking?

Land Banking is simply the process of securing future development sites today, at the current price.

Many large Australian property development companies buy greenfield sites, farms or large tracts of land and put them in their ‘land bank’ to ensure they have a sufficient stock of land for future developments. Over time they rezone the land, put in the necessary roads and infrastructure, undertake a subdivision and on sell the individual lots.

Why is Australian land banking a good investment strategy?

Many Australian Business investors have made small fortunes by land banking because they’re able to use a number of different property wealth accelerators that, when combined, generate substantial profits:

1. Land appreciates – we all know that it’s the land component of your property investment that appreciates, so buying a property close to its land value can be a smart strategy.

2. Adding Value – by obtaining development approvals you can add substantial value to a property.

Once you obtain a development approval for subdivision or for multiple dwellings, apartments or townhouses, you’ve taken out one element of the development risk – the council approval process.

This makes your property more attractive to developers who may be prepared to pay a premium for it and gives you the option of selling for a profit or refinancing your property and continuing with the development process.

3. Riding the property cycle – I like securing potential development sites in a ‘soft’ property market. At these times, completing a development may not be particularly lucrative, so I can buy these sites at a good price.

Advantages of Land Banking

One of the great advantages of land banking over other kinds of investment is this: the investor owns something that physically exists. This is different to stock and commodity traders who own a certificate, a piece of the business which is not really tangible to certain people or in other more complex finance instruments, they are just “numbers on a computer”. Land banking thus often appeals to a different kind of investor who like the idea that their investment is actually a tangible asset.

We are Chartered Accountants in Australia helping small to medium businesses with a specialty of understanding the space that relates to the Building and construction industry. If you want to know more about Australian Bank Landing, contact us on 9597 9966. Our location is at 563 North Road Ormond Victoria 3204 Australia.