Hi Guys
I Have a development block in Central Mandurah, I bought in a long time before the boom so if i sell I wont be loosing money …but…. the value of the block has dropped back a fair bit since the peak. My quandry is that the whole of central Mandurah is in the process of being rezoned to R60 (6 units per 1000m2), so my block will go from a 3 unit site to a 4/5 unit site in about 18months time. The problem with this is that a LOT of properties on the other side of the nearby main road will also be rezoned, at the moment all these properties are zoned for duplexs and are selling at duplex (with potential) prices … so when these are developed the per unit land cost will be much lower than the standard for the area and already completed unit prices are dropping. Does anyone have any thoughts on selling or not???? Holding costs are minimal and i was thinking that at the moment 8% on a fixed term cash deposit is very good for no risk …. and i think there will be some real bargains on the market next year. The sale prices have dropped about $130K+ … I will probably loose about $60K in CGT?? Any thoughts … anyone with experience in the area??
This will be the first time I have sold anything and i am a little nervous about regretting it in the future – i don't want to be one of the sheeple jumping on the bandwagon but with the rezoning i think it will be a very long time before i get the same money … and with zoning change i would have to build two storey untis which increases the development costs more than it increases the sale price …. if that make sense …
If the holding costs are killing you and life isn't fun, then sell.
If you can hold it comfortably, then hold on.
Land always appreciates long term, and if it's rezoned for more units later on, then even better for you.
Anrobel wrote:This will be the first time I have sold anything and i am a little nervous about regretting it in the future – i don't want to be one of the sheeple jumping on the bandwagon but with the rezoning i think it will be a very long time before i get the same money … and with zoning change i would have to build two storey untis which increases the development costs more than it increases the sale price …. if that make sense …I used to live in Mandurah in the early 1980's when I worked for Alcoa in Pinjarra, ….. Anyway, … moving on. Reading your post it reads to me like you've already answered your own question. The only thing I'd like to add is: ….
….. Are you looking to sell because you don't think you'll EVER get as good a sale price again? Remember that property moves in cycles and WA needed to take a breather. If it's well located and will be a multi dwelling development site then you'd imagine that it will go up in price especially after re-zoning.
Don't sell because of the fear of missing out, ….. You don't have to develop the site yourself to realise it's true value, ….. If a developer can see profit in the deal then they will pay for the block.
If you don't need to sell now, ….. logic would say that you'll make a heap more in the future. Mandurah is a popular town and now that they have the freeway and train linking it to Perth you'd have to imagine that the only change that will happen is growth.
Think seriously and research before making the sell decision, …. I have made several mistakes from selling property instead of holding …… if you do sell, .. do so for the right reasons and not through fear of missing out today.
Martin
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