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I look at longterm ‘like on like’ sales, ie resales of the same property. In truth, it is more difficult/inaccurate to compare 57 xyz st to 22 tuvalu rd than a resale of the same property.
In my own LGA the stats show 7 or 8% pa, I see somewhere between 4-5%. Why?
Disparity of comparability. The area has a fair degree of knock-downs & rebuilds. These resales combined with sales of refurbished & upgraded properties skews the median substantially.
As for units, the construction & sales of 30-40 units is reflected as an increase in the basic price of all units
WomeninPropMelb wrote:…It is different in NSW because as I understand it, you have to get a building and pest inspection completed BEFORE you make an offer.It is not a prerequisite to have these done in NSW before making an offer – the cooling off period allows the purchaser to retract from the contract within 5 days for a minimal penalty (0.25% of purchase value).
Where the purchaser has undertaken Pest & Building inspections prior to making the offer, then it is usual to sign a S66W waiving the cooling off period.
Anthony, as far as I am aware, in NSW the cooling off clause specifically states the penalty of .25% of the contact value. The consideration is paid for the exclusive period for investigations
If you recind the contract, a charge of 0.25% of the purchase price will apply, this may be peanuts compared to the legal costs in the future esp if the builder declares themselves bankrupt/dies/refuses to do the repairs.
You only mention the strata report – was a building report done as well? What was the buidling surveyor's feedback?
In light of the expected costs, you could either pull out or start some negotitations on price to cover the loss of value and foreseeable consultancy/expert opinions/legal costs in relation to the repairs.
The main issue is price – the closer you are to the market the sooner you will lease the property. Even if you drop below market to rent it out quicker you will more than make up for the drop by having leased the house out sooner rather than losing $200 per week waiting for the extra $25 which may take another month.
End of financial year, it is winter (traditionally slow market), coming up to school holidays, you name it.
Hi Anthony,
congrats & welcome etc.
1) You have very little in super at present and unless you have a smsf you can't gain any form of control over it. However, if you were in position to, you would be only investing for the long term (at least another 28-33 years time) so it is a long time to lock away your money but the upside is it CGT free once you hit retirement age and income is concessionally taxed up until that time) – super laws change all too frequently so you probably wouldn't go down that path yet….
2) Is your gf going to be a willing participant? ie will she join you in your investments, like your ex? This will add to your borrowing capacity. At present, you have around 20% equity in your current IP, the banks may allow you to redraw some of this equity to act as a deposit for your next property.
3) Is your current loan P&I or IO? Interest only will reduce your repayments (and increase your borrowing capacity) but in a stagnant/falling market will not get you far as the LVR may outstrip your equity, however this works well in a rising market but who knows when that is going to happen?
4) Why has your property only increased 40k in 2 years? It is more like $72k over 3 years or just over 5% annually. Markets do move but are not necessarily as apparent or volatile as equities, as the only time you know how much you are going to make on a property is the day you sell, you may be on a rollercoaster but won't realise it because you are not in the market.
If the block is already paid off, what is the demand as a raw block of land? Are they rare in the area? is it well located? Would it have more attraction to a buyer as a home rather than a project?
Do your numbers and determine whether it will be better to build (use a project home builder & slightly upspec to suit the market) or to sell as is. If you sell now, you will be paying exit costs (agent/marketing etc) as well as stamp duty etc on the new purchases (you'll still pay all of these if you develop but the pain will be a little less).
Remember, if you have the construction skills & background use it for good (not for hard work).
yes it is jd, how do you know what you are getting without the lease?
If you contact an agent, they will be all over you like a rash for quite a while – the sniff of doom or dispair will get them rubbing their hands. ;(
You could approach a valuer – give them a proper brief ie property settlement for a break-up etc. They will do the groundwork and provide you with the right information. Then you might seek an agent's appraisal (of course this will paint the rosiest picture out, highest price, not the doom and gloom which exists at present in the Qld market).
tjunction wrote:Hi Scott No Mates,
Can you PM me RE properties returning good yields too.
Cheers, TobyHi Toby,
please turn on your PM's or send me one so I can respond.
SNM
I heard an anecdote from someone yesterday when we were having coffee – he said he and two of his mates bought at about the same time in Sydney 15 years ago approx, one an old semi in the innerwest @ $150k, the other in Campbelltown got a new house for his money & he got a run down house on the north shore. His first mate sold for $850k+ having continued the maintenance & minor works, the other is only sitting on a $400k house and he is around the $1m. Always consider what you are buying & the prospects.
(PS – Northmead will continue to pick up, just a hunch).
Underpants ……. Profit.
Find out what the market wants (speak to agents), see if is possible (town planner), find out what it’s worth (agent)
copy the plans & cover the title block
Sounds pretty poor to my way of thinking. For 2:1 will allow 2800 m2 development on 2×700 m2 lots. But with only 30% site coverage you will have a 6.7 storey building which is about 12 m deep.
Danny, with an established area like Lidcombe, it will always be in demand. New areas, esp newly developed houses will depreciate for several years until the capital value of the land appreciates markedly, so an early sale of the property will generally result in a capital loss or only a very small gain depending upon how much stock is on the market and where new land releases are/how these will affect you.
So the decision then becomes, how long do you hold on to asset A or Asset B to achieve the same return. If you have sold for a capital loss this can be carried forward indefinitely whereas if you make a capital gain, you must pay tax on it in the year it is assessed.
I can’t comment on the victorian property as I don’t know the location. Suffice to say it is a house, you can do as you like with it. Is it in a growth area?
As for Lidcombe, good location with trainlines and all facilities. Is there a good or bad body corporate & strata management? Why do you want to part with either property? Is refinancing an option to reduce your repayments?
Abmyboy, when was cpi last running @ 8%?
1% on options is not unusual, it is typical, the trick is keeping the option period down to 12 months & strike a sale price which covers some growth/pain but nothing which makes the deal unviable.
Thx Michael, check your inbox.
talk to the local property managers – they will tell you what they have the most demand for. Families who relocate don’t need furnishing, fly-in fly-outs don’t bring their family.
