Introduction to the Australian House & Land Industry

Australia's house and land industry focuses on selling land and construction packages as a combined investment. It operates differently from traditional real estate, as buyers enter into a two-part contract:

Land Contract – Purchased directly from a land developer.
Build Contract – Entered with a builder to construct a home on the purchased land.

This structure allows buyers to choose their preferred lot and customise their home design while benefiting from government incentives like the First Home Owner Grant (FHOG) and stamp duty savings (only payable on land, not construction).

The Australian house and land industry is a complex and dynamic one, with a number of different players involved. This document will provide an overview of the industry and how it works with channel partners.

Key Players in the Australian House and Land Industry

Developers: Developers are responsible for acquiring land, obtaining planning approval, and constructing new homes.
Builders: Builders are responsible for constructing new homes and carrying out renovations and extensions.
Lenders: Lenders provide finance to developers, builders, and homebuyers.
Lawyers: Conveyancers handle the legal aspects of property transactions.
Channel partners: Channel partners are businesses that work with developers and builders to sell new homes.
Distributors: These are businesses like Kenekt who aggregate package data and provide easy connectivity with the builders and the options they provide.

The Role of Channel Partners

Channel partners play a crucial role in the house and land sales process by connecting buyers with developers and builders. Their main responsibilities include:

Marketing available house & land packages via social media, websites, and email campaigns.
Educating buyers about the benefits, process, and financing options.
Facilitating introductions between buyers and developers/builders.
Assisting with contract execution and guiding clients through the buying process.
Maintaining strong relationships with developers and builders to secure the best deals, commissions, and exclusive inventory.

Commissions & Incentives: Channel partners earn commissions for each successful sale, often structured as a fixed percentage of the land and/or build price. Some developers also offer incentives or bonuses for high-performing partners.

Channel partners play an important role in the Australian house and land industry. They work with developers and builders to sell new homes to buyers, and they typically receive a commission from the developer or builder for each home they sell.

Benefits of Working with Channel Partners

There are a number of benefits to working with channel partners, including:

Increased reach: Channel partners can help developers and builders reach a wider audience of potential buyers.
Expertise: Channel partners have the expertise and experience to help buyers find the right home for their needs. The same BDM resource in-house would cost a lot of money and resources.
Trust: Buyers trust channel partners to provide them with honest and reliable advice.
Convenience: Channel partners can make the process of buying a new home easier and more convenient for buyers.

How House & Land Sales Work

Understanding House & Land Financing

House & land purchases require different financing structures compared to existing homes:

Land Loans – Traditional home loans with a deposit requirement (5-20%).
Construction Loans – Progress payments are made to the builder in stages as construction progresses.
Government Grants & Incentives – Many buyers benefit from FHOG and stamp duty concessions.

It’s essential to ensure buyers understand the cost breakdown, including:

✔ Land price ✔ Build price ✔ Site costs (land preparation, fencing, landscaping) ✔ Additional upgrades or customizations

Wholesale vs. Retail Builders

In the Australian construction industry, builders are classified into wholesale and retail builders, each serving different market segments.

Wholesale Builders:

Focus on high-volume construction, working primarily with channel partners, developers, and investors.
Offer fixed pricing with minimal customisation to keep costs low and margins stable.
Typically, they do not engage directly with the public but sell through agents, developers, and investment groups.
Often, they have pre-negotiated pricing for land and house packages, making them attractive for investors.
Faster build times due to standardised designs and streamlined processes.

Retail Builders:

Work directly with homebuyers, offering a high level of customisation.
More flexible with design, layout changes, and premium finishes.
Engage in marketing and showroom presentations to attract individual buyers.
Higher pricing compared to wholesale builders but provides a personalised experience.
Often, they focus on owner-occupiers rather than investors.

Both types of builders play an essential role in the house and land industry. Wholesale builders cater to investors and make bulk sales, while retail builders focus on delivering customised homes for end-users.

Kenekt attempts to work only with wholesale builders.

Here’s a simple flow diagram illustrating how the supply chain in wholesale house & land sales works:

1️⃣ Land Developer → Develops and releases land lots for sale

2️⃣ Wholesale Builder → Offers pre-designed house plans at fixed pricing

3️⃣ Channel Partners (Agents & Marketers) → Market house & land packages to buyers

4️⃣ Investors & Buyers → Purchase packages through agents

5️⃣ Finance & Legal → Secures financing and manages contracts

6️⃣ Construction Process → Builder completes home on purchased land

7️⃣ Handover & Rental Management → Buyer receives property, rents it out if an investor