Does land size matter more than house size when buying property?
Say you’re looking at two listings in the same suburb at the same price. One is a 280 square metre house on 450 square metres of land. The other is a 190 square metre house on 700. Which one do you buy?
It comes up a lot in my conversations with buyers, and I understand why. Floor area is easy to feel when you walk through a home. Land is harder, because you can’t hold a boundary in your hand. So buyers fall for the bigger house and sometimes pay for it later.
The short answer
Over the long run, land usually matters more, because land holds its value while a building ages. In the short run, and on small lots, apartments and townhouses, the house is most of what you’re buying. So the honest answer depends on the lot, the street and what you plan to do with the place.
1. Land usually holds its value longer
When I look at the long-term property value Perth owners can count on, land is the part I trust most. Think of a house as a car and the land as the garage underneath it. The car gets older every year. The garage doesn’t.
2. House size still counts, up to a point
Bedrooms, bathrooms and living space matter because families need them, and a cramped house on a huge block is still a cramped house. But past a certain size, extra rooms add less than buyers expect. A fifth bedroom rarely adds what a fifth bedroom costs to build.
Why land tends to carry the value
1. Land doesn’t wear out
A house is a bundle of parts with expiry dates. The roof, wiring, plumbing, bathrooms and kitchen all age, and all of them cost real money to replace. Land has no such parts. A 600 square metre block is a 600 square metre block in forty years, and that sameness is exactly why buyers and lenders trust it.
2. Nobody is making more of it
Most of Perth’s inner riverside suburbs are built out. South Perth, Como, Applecross and Kensington aren’t getting new streets. When a larger block comes up in a good pocket, the pool of buyers who want it stays large while the supply stays tiny. You can add a bedroom to a house. You can’t add a metre to the boundary.
3. Where land wins most
Land carries the most weight on riverside streets, near good schools and in character pockets where the existing homes are older. In those places, plenty of buyers see the house as a placeholder and the block as the prize. I’d be careful with that thinking, though, because it only works when the numbers say so. More on that further down.
When house size and quality win
1. Small lots, townhouses and apartments
On a townhouse or apartment, the land share is small or shared, so the building is most of what you’re buying. Size, layout, finish, strata costs and the quality of the complex drive price. Comparing land size here tells you very little. Compare floor area, outlook, parking and what the strata levies look like.
2. Build quality and layout
A solid house with a sensible plan is worth real money, even if the block is ordinary.
Good bones on a modest block
Thick slab, decent roof, good natural light, bedrooms placed where you’d put them yourself. These houses are easy to live in and easy to resell. A modest block with a well-built home often beats a bigger block with a house you’d have to fight.
A weak house on a big block
Here the land value is real, but the house may be worth less than nothing. If you’d demolish it, the price you pay for the house is wasted money. Buyers need to ask whether they’re buying a home or a building site, and price accordingly.
3. Buyers who don’t want a project
If you have a young family, a full diary and no appetite for tradies, I’d weigh the house first. A well-presented home on a smaller block can be the better buy, because the value you get is the year of weekends you don’t spend on renovations. Some buyers will disagree with me on that. They’re welcome to.
What you can do with the land
1. Subdivision and the R-Codes
A big block is only worth more if you can use the extra space. In WA, subdividing needs approval from the local council and the WA Planning Commission, and the rules turn on the lot’s zoning.
Density codes and lot size
The Residential Design Codes, known as the R-Codes, set minimum lot sizes and how many homes a block can carry. Two blocks of the same size can have different potential because they carry different codes. Check the code with the local council before you assume anything, and don’t rely on a listing’s claim of “subdivision potential.” If development is on your mind, brief the professional properly, because a house valuation Perth buyers commission for a block like this should say clearly whether it includes any development upside.
Shape, access and easements
Frontage matters. A wide, regular block divides far more easily than a long, narrow one, and a battle-axe layout needs room for a driveway. Easements for sewer or drainage can quietly kill a plan, and they show on the title.
2. Extending, pools and extra dwellings
Even if subdivision is off the table, a bigger block gives you options. You can extend, add a pool, build a studio or, where council rules allow, put in an ancillary dwelling. Setbacks and site coverage rules still apply, so a large block doesn’t mean you can build anywhere on it. Ask what the council would approve before paying for what you hope it will.
3. Knock-down rebuilds
An older house on a good block in a good street invites the knock-down rebuild. You pay for the land, demolish, and build new. The test is simple and unforgiving. Add the purchase price, demolition, the build quote and your finance costs, then compare the total with what finished homes sell for in that street. That total is what sets the property value Perth buyers actually get from the project. If it doesn’t fit under the comparable sales, the block was too expensive.
How to compare two properties
1. Price per square metre of land
Divide the price by the land area and you get a rough rate. It’s a crude tool and it only works between similar properties. Comparing a house on 450 square metres with one on 700 means little if one is renovated and the other is a teardown. Use it to spot oddities, not to decide.
2. Check the title and the plan
Landgate holds the certificate of title and the plan for every lot in the state. They show the real land size, the boundaries, easements and any covenants. A listing can round a number or lean on a generous description. The title doesn’t.
3. Get an outside number
Ask a local agent for an appraisal, since an appraisal built on recent sales and live buyer demand shows how the market sees the land and the house together. A formal house valuation Perth lenders accept comes from a certified practising valuer and costs money, but it makes sense when the purchase is large, unusual or built around development. Before you offer, run through this:
- Check the lot size on the title, not the listing.
- Look up the R-Code and ask the council what’s allowed.
- List the sales of similar lots from the past three to six months.
- Get quotes for any demolition, building or repairs.
- Ask for an appraisal from someone who works the suburb.
Conclusion
Land usually matters more over the long run, house quality matters more on small lots and for buyers who want to move straight in, and the best purchases sit where both are strong. The deciding factor is rarely the block or the house alone. It’s whether the numbers still work after you add what the place needs. A realistic property value Perth buyers and sellers can trust starts with sales evidence, not wishful thinking about square metres. If you’re selling and want to know how the market sees your land and your house, request a complimentary appraisal on my property appraisals or call me on 0418 896 354.
Frequently asked questions
1. Is land or house more important for resale?
For houses on freehold blocks, land usually drives long-term resale value, because it doesn’t age. For apartments and townhouses, the building, its location and its condition matter more.
2. How do I find a property’s land size?
Check the certificate of title and plan through Landgate. Listings often show land size too, but the title is the official record.
3. Does a bigger block always sell for more?
No. A big block with a poor shape, easements or tight planning rules can sell for less than a smaller, better-placed one. Street, position and use matter as much as the number.
4. Can I subdivide any large block in Perth?
No. Approval depends on the lot’s zoning and R-Code, its shape, access and services, and sign-off from the council and the WA Planning Commission. Confirm with the council before you pay for the potential.
5. Will a valuation include subdivision potential?
Not automatically. If you want a house valuation Perth valuers prepare to cover development upside, tell them in the brief so they can address it in the report.