Vacant land lending
Vacant land loans: from residential blocks to larger acreage
Looking for a little more room to move?
Whether you're purchasing a residential block, securing a few hectares for your future home, or looking at a larger acreage property, financing vacant land isn't always as straightforward as financing an established house.
Different lenders have different requirements when it comes to property size, location, zoning, access, available services and what you ultimately intend to do with the land.
At Valley Lending Co., we work with a broad panel of lenders, including specialist and regional options, to help identify suitable finance solutions for vacant land purchases that may not fit traditional lending criteria.
Discuss Your Vacant Land Purchase
Does the size of your land affect your finance options?
Absolutely. Land size can have a significant impact on which lenders will consider your application, how the property is assessed and the deposit you may need.
While there is no universal maximum land size across all lenders, larger properties can attract additional lending requirements.
Under 10 hectares
Smaller vacant land purchases may be suitable for a broader range of residential lenders, depending on the property's location, zoning, services and intended use.
Even relatively small parcels can attract additional scrutiny if they are remote, difficult to access or have unusual characteristics.
10 to 50 hectares
As land size increases, lender options can become more limited.
Some lenders may consider these properties under residential lending policies, while others apply additional requirements relating to location, land use, improvements and overall marketability.
Understanding which lenders are comfortable with larger vacant land securities can make a significant difference.
50 to 100 hectares
This is where lender selection becomes particularly important.
Many traditional residential lending policies have restrictions around larger landholdings, but that doesn't necessarily mean the purchase requires commercial finance.
Depending on the property and circumstances, residential lending options may still be available through lenders with more accommodating acreage policies.
Over 100 hectares
Financing vacant land exceeding 100 hectares generally requires a more considered approach. The property's intended use, zoning, income-producing potential, location and suitability as residential security can all influence the available finance options.
Some purchases may remain suitable for residential lending, while others may require specialist rural or commercial finance. Valley Lending Co. can help assess the property and explore the appropriate lending pathway.
Buying vacant land now, building later?
Not everyone purchasing vacant land intends to start construction immediately.
You might be securing your ideal block while continuing to live elsewhere, planning a future relocation, or purchasing land now with the intention of building several years down the track.
Different lenders have different requirements around vacant land purchases and future construction intentions. Some may be comfortable with longer-term vacant land ownership, while others may place additional conditions on the loan or intended construction timeframe.
We can help explore options based on your plans, whether you're ready to build now or simply securing the land for the future.
Lifestyle property or working farm: why does it matter?
Two vacant properties of the same size can be treated very differently by lenders depending on their intended use.
For example, purchasing 60 hectares to build a family home, keep horses and enjoy a rural lifestyle is a different lending proposition from purchasing the same property to establish a commercial agricultural operation.
Lenders may consider:
- Whether the land is primarily intended for residential or commercial use
- The property's zoning and permitted activities
- Whether the land currently generates agricultural income
- Any existing or proposed farming operations
- Whether a residential dwelling is intended to be constructed
- The overall suitability of the property as residential loan security
Importantly, rural zoning or a larger landholding does not automatically mean a property must be financed through a commercial loan. The individual circumstances matter. See the working farms page for more on financing a property that is operating, or could operate, as a commercial farm.
What else do lenders consider when financing vacant acreage?
Land size is only one part of the assessment.
Location and remoteness
Properties in regional or remote locations may have fewer suitable lending options than those close to established towns and population centres.
Road access
Legal and practical access to the property can influence its suitability as loan security, particularly where access is via private roads or easements.
Zoning and land use
Lenders may consider the property's zoning, permitted activities and whether its intended use aligns with residential lending requirements.
Services and infrastructure
The availability of electricity, water, telecommunications and other essential services may influence a lender's assessment.
Property features
Topography, flood exposure, existing improvements and other physical characteristics can affect valuation and lender acceptance.
Future construction plans
Whether you intend to build immediately, in several years or not at all can influence which finance options are appropriate.
Been told your vacant land is too large to finance?
A decline from one lender doesn't necessarily mean your property is unfinanceable.
Some lenders have relatively restrictive acreage policies, while others are more comfortable considering larger or less conventional rural properties.
With access to a broad panel of lenders, including specialist and regional options, Valley Lending Co. can help investigate alternatives based on your individual circumstances.
Whether you're purchasing 5 hectares, 50 hectares or more than 100 hectares, understanding the property and selecting an appropriate lender is an important part of the process.