Brisbane house and land packages

I was pretty interested in reading a thread earlier in the week of a member with a good h & l strategy in Melbourne.

My question is if what Brisbane house and land packages would be best for long term gc?

Not sure if there is many more master planned communities apart from Springfield Lakes.

 

Since there has been a number of views but no replies thought I would give you my thoughts.

If you are after CG (you wrote gc) H&L can be difficult to achieve it as it all comes down to supply and demand.

In property one major rule is land appreciates and buildings depreciate. Land can improve with amities and the higher the scarcity of the land it the more valuable it is & will become. Easy examples; land within 5km of CBD is more valuable than land within 50km of CBD as there is a heap of land in that additional 45km or land on the beach front is worth more than land 200m from the beach because there is less of it but has more demand (a lot of people would love to live within 5km of the CBD on 1,000m2 of land or live right on the beachfront). However people with the bigger wallets are the ones that live in these houses.

With H&L packages the land isn't that valuable as there is a lot of supply of land but not as concentrated demand. Generally speaking they may open up a new estate 2km down the road and it will impacts your future gains. E.g. say you paid 300k for you 500m2 block of land and the new estate are selling 500m2 for 250k or 300k, this would effect your land value.

So land isn't really going to appreciate to quickly from these H&L estates.

Lets look at the house, when you build new there is no further improvements you can make to make it better than new (except to rebuild 1 year later but you would destroy value in the process).

So you have a hugely deprecating asset (200k @ 2.5% = 5k p.a.) and the land is not likely to be going up as a new estate is going up 2km down the road. Even if the land for 500m2 was selling for 300k one year later... Yes your land is more valuable (just and debatable) however the purchaser can build THEIR home and not inherit your home and make changes.

Further in H&L the infrastructure usually lags behind by a number of years. Schools, Public Transport (trains), Roads, Schools, Shops. If you were familiar with Melbourne go look at Doreen which is a H&L estate area (been that way for a good number of years).

There is one single lane road (each way) in and out of Doreen, the traffic is gridlocked as there is a set of lights before you get onto a highway (not freeway). There is still a lack of schools the locals say, there is also no real shopping centre or cinemas, there is no train (or plans for trains). They are still creating new estates... My brother in law is waiting for titles to clear but even once they clear there is still going to be more. From Doreen to Whittlesea there is a heap of farmland that can be developed just like Doreen is.

I don't know if it is still true but 3 years ago people were selling their homes for less than what they paid for H&L 2-3 years earlier. It might be different now since Melbourne has boomed but how has the boom in Doreen compared to Rosanna (not that I live here)?

Finally on the land part the developer who builds the estates make their money from the land so do you think the land price is inflated? To give you an idea my wife (gf at the time) was looking at buying in Epping on a 400m2 block and my block in Watsonia is 550m2. The land price was significantly more expensive than my land value on my rates notice. I know which of the two areas have gone up more since that time...

End of the day do what you feel is right, H&L are not my strategy I know that some people make money from it but to me it doesn't sit right with me.

 

What about buying an old house (not heritage), demolishing and building a new home. Look around the mid ring suburbs for some old fibro place on 16 perches.

 

I like your thinking.....

 

Even if you don't have funds to renovate straight away and therefore low tent for a while it's still better than h&l imo

 

One thing I will add though is that there is good depreciation on h and l. I still wouldn't do it though