QLD Brisbane Property Q4 2016

$600K+ I guess

 

Reno to do, not for a faint hearted. Going for a weekday auction.. Only 2/1 unless you could convert sleep outs(?) to 4/1. Downstairs not legal height. Attractive corner block to subdivide but I would say 650 max

 

I find it weird that it is a corner block on 800m2+ land and yet no aerial photograph.

If a developer was scanning through the adverts it would grab far more attention if it had an aerial photograph showing that it is 800m2+ of land and on a corner site.

Something like this ad

106 Stanley Road Camp Hill Qld 4152 - House for Sale #124068786 - realestate.com.au

or this one

77 Willard Street Carina Heights Qld 4152 - House for Sale #124312774 - realestate.com.au

Or a combination of both where it has the view from the city with the m2 listed on the picture.

For the cost of $200 I think it would be well worth it, especially since the house is not much chop.

 

It's been sold by the Public Trustee and I don't think I've ever seen them market like a boutique agent with aerial or drone photos etc.. they do take a tonne of photos and give a very detailed description which is good..

They usually get quite a bit of interest from the ones I've been to.. everyone thinks they may get a bargain but they never sell below a set reserve, based on a professional valuation. They should know the development potential and I'd be surprised if a vacant 400sqm block would sell for less than $450k in Carina? Maybe slightly less for the corner? But less than $800k for both of them at auction would be a bargain imo.

 

I agree state trustee everyone thinks they will get a bargain but since it is advertised out to the greater public the chances are very slim.

Bit different to perhaps the US shows of foreclosure sales, I haven't looked into these but they might be a different kettle of fish as maybe the majority of people might not have visibility of the sale.

I know little of what the market in Carina but I would think you probably would get 400-450k for a 400m2 block however you are looking at the retail price. The developer would need to provide essential services (sewerage, power, water, drainage etc) which is likely to cost them ~50k each block or 100k in development cost + holding. So my guess is likely 600-650k as the developer needs to profit off it.

This would equal
600-650k purchase
25k purchasing cost (stamp, legal, transfer)
100k development cost
30k selling fees
Holding 12-24k (600k @ 4% for 1 year is 24k)
total - 767-829k

Sells two block for 2x 400-450k = 800-900k

Profit could be NEG29k -> 133k

I have don't no DD and just making up numbers but I don't think the 800k would be viable for the developer unless they can get 600k for each block on retail or the zoning density is greater than 2x400m2 lots.

 

It looks like it probably would be but do we know if the block is subdividable as that would significantly alter the potential sale price.

 

I find that the vast majority of advertised prices for splitter blocks leave no room for profit for developers.. similarly looking at the sold prices. The best deals are off realestate.com.au imo. If it's advertised on there, "attention developers" then you know it's a waste of time

I believe there could be room for profit if you slide the existing house over and sell off or develop the empty block.

 

53 Florence st and 6 Royds st (on two separate blocks) are a mirror image of this one.

 

Agree, attention developers normally says 'attention uneducated developers'.

Could slide the house across maybe, I am not looking at inspecting it let alone purchasing it.

The more money a developer spends the more risky it is for them and less profit they make... Sometimes the uneducated developer can end up losing a lot of money. E.g. think pay 800k then sell 2 blocks of 400 @ 450k each = 900k profit less holding and selling cost it is 50k clear profit... Unfortunately this is very different from the reality.

Where I recently purchased in Brisbane I was speaking with a developer and he paid 620k and once built the 3 blocks he hopes to get just over 1m (2x330k + 1x 350k). Sounds great and you go wow that is ~400k in profit before expenses.

However his exact words are he will be lucky to make a profit.

 

I agree mate. To really make a splitter deal work in this current market environment you really need to get the land at the right price which is getting very hard to do.

 

Brisbane's $100 million cruise ship terminal gets closer

 

I

FYI.
I've stopped hyping Brisbane now..it's got momentum amd will deliver.
Besides, I need a new challenge... Like hyping Salisbury, Woodridge etc...

 

I'm not really hyping Brisbane I just really like the place and want to see it continue to move ahead so I'm happy to provide updates on here about the projects as they roll out it's going to be pretty different in 5 years time.

 

Yes.. Brisbane. with activities currently or planned like the cruise ship terminal above have not only clearly established a direction, but that directional movement is gaining in momentum which will see sustainable growth and faster cg as those activities /projects progress...
The past 3 years of continuous yet stable and sustainable growth is a good backup of thr above.

 

Say Luggage Point to a Brisbanite and watch the facial expressions

 

Targeting certain Brisbane luxury markets (develp/reno) is where the big $$$ is at for the next few years imo. If it suits an investor's strategy then I'd be there like white on rice.

my 2 cents.

 

Please provide further details and rationale

 

OO are wiling to pay a premium for luxury stock in certain areas. It's based on my research and sales of peers for similar stock. Beyond that ppl will have to do their own DD.

 

Very coy.
My take: Within 3kms. City views or river proximity. And yes a modern indoor/outdoor flow and architectural. I've seen some big sales with these criteria. People will pay a big premium for modern (beyond what I see as long term value considering build quality and opportunity to add value) but OO pov is very different to investor pov.

 

Spot on. Only thing I would add is probably up to the 5km if you bought the land at the right time/price.

Regarding being coy, you would be too if it was the key market you're currently working on

I get so many PMs from people who want me to literally do a feasibility study to tell them if their deal is worth it...