Bibra Lake 'future development potential' sites

Hi guys,
just wondering if anyone has any advice for me. I'm looking at a corner site in Bibra Lake that has future rezoning potential for R40. I'm wondering if the prices have inflated for these 'future potential' sites in anticipation.

I thought might be a good buy around $600/m2 in the current market. (whether they sell for that is another story) My guess is Perth has a further 2-4% to fall by the end of 2016 so will try to factor that in.

Land or villa sales evidence in the area is little to none so stealing sales figures from neighbouring suburbs (risky?!) price /sqm i'm assuming at $800/m2
Villas, not sure any suggestions, comments?

@MTR I know you've done some work in the Spearwood area? Any thoughts?

Thanks

 

Steal numbers using a 500m radius going back a few years and adjust for annual price changes . This is one method a valuer would use.

 

Thanks for the reply. Only problem is its all R20 at the moment so no sales evidence to go buy as no one has really subdivided yet.

 

That's part of the risks with doing those feasos - all you can do is try and extrapolate from similar products in neighbouring areas, and adjust for superior/inferior location.

I have to say though, I wouldn't be using per sqm comparisions - I would just be comparing like for like.

 

I developed in Spearwood, if you are looking at buying a site to develop in this area they wont make sense today. If you are looking to maximise block, apartments don't make sense either because we have an oversupply, who is going to buy?

I am the wrong person to comment on Perth because I am not bullish whatsoever and I think anyone buying now is making a mistake and its speculative, as property prices are still falling and rents have already fallen back and if you read various posts it is harder to rent today due to oversupply.
I don't believe in holding property in the hope it will rise, if I am buying today I am buying because the market is strong, unfortunately our economy is weak and no signs of improving in the immediate future.

MTR

 

Thanks guys
When you say the site won't make sense today do you mean the final product won't work ie. Single level villas?

I agree Perth is a not ideal today and further falls are probably likely.
I'm having trouble picking a place to develop in. Brisbane is getting tough to find sites in a tight market. Melbourne the same and i'm a little unsure how much further the golden run has left over there.

I'm thinking of going with a buyers agent to find a site in Brissy, which I believe may have small but steady growth over the next year or two.

 

What type of site are you looking for in Brissy?

 

Anything that stacks up I guess. Up to $1.1m TDC. Borrowing capacity is my problem these days since i've thrown in the towel with my engineering career.

Likely a splitter block, or duplex, whatever can make money. Any tips?
I'm also considering Toowoomba with the low development costs. Keeping in mind this is not a develop and hold - just in and out to raise capital for future developments. My strategy has changed since my borrowing capacity has decreased.

 

There was a splitter site in Brisbane middle ring with a similar TDC (didn't do any DD) offered to me a few weeks ago off market by an agent friend of mine and I turned it down as I wanted a larger project. I don't know if its still available but I'll PM you the agent to contact.

 

That'd be great! Thanks for that

 

luuvvvvvvvvv that avatar

 

I just posted a site in Melb??? search my posts.



the other option is to develop and hold, not sell, but this makes little sense because you may be waiting for years for growth, and why would you build, takes 12 months, pots of money, just go out and buy new units would be much easier proposition and you can not buy back time.

 

Thanks! I took this shot in Bingin, Bali. I used to live there!

 

Agreed. I think develop and hold is a great strategy for some, not for me at the moment though.

The Melbourne site you mentioned that you posted, I can't find it. I'm new to this forum so a little unfamiliar with it sorry

 

Not recommending you buy as I have not looked at the nitty gritty, but certainly something like this is what I would be trying to source if I was new to the deve game, one simple strategy

8 Carlyle Street Croydon Vic 3136 - House for Sale #123559038 - realestate.com.au

 

What kind of dev could be possible on that site @MTR ?

 

Plenty stacking up in Perth at conservative (current minus 5%) values at the minute.

Just stay out of traditional development suburbs.

Trouble is, you'll probably need that 5% grace at the moment.....

At a glance on my lunch break I found ....

Vic Park has two.
Butler has (another) one.
Clarkson has one.
Coogee has one.

Spend a bit longer and find a few more already.

 

That makes sense and perhaps overly techniclal

Valuers typically rely on neighbouring suburbs if lack of comparables are evident.

 

There seems to be a lot of people just chopping up and selling their blocks in Perth at the moment, (thinking like Mullaloo etc) to find a site which doesn't have that inflation due to rezoning seems to have become harder, but I certainly agree, there are winners out there.

 

Sounds like youre wanting to develop, then focis on the one simple and clear bit in the minefield that is developments - profit profit profit.

Throw hope and prayers in the bin, theyre not only irrelevant theyrr dangerous.
Until and unless you find a site that, conservatively and with contingencies, looks like it will make whatever margin you are looking for, simply do not buy.

There is no rush, no prizes for passing go first and a lot more to lose than to gain by buying an unprofitable site in exasperation after being frustrated by other unprofitable sites.

A problem isnt solved by buying a property with exactly the same issue (insufficient profit) that caused the problem in the first place