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buying new land releases

Discussion in 'Where to Buy' started by skuzy, 8th Sep, 2015.

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  1. skuzy

    skuzy Well-Known Member

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    hi everyone.
    had a chat with a friend on the weekend whos strategy involves only buying new land releases. eg in NSW middleton grange, oran park area.. (completely new areas) then building/developing houses for future sale.
    hes view is he could not buy an existing block to knockdown and rebuild (way too expensive).

    i've never thought of this approach and was interested to hear peoples views on this strategy? I was only ever interested in established areas, but not to buy knockdown and rebuild.

    Thanks.
     
  2. Sunny Bill

    Sunny Bill Active Member

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    I have used this strategy in Perth. Works well if you get in on the first release of some new land developments. A lot of due diligence is still required as not all land releases are equal. Also you have to be careful at what stage of the property cycle an area is at. For example in Perth at the moment you would struggle to make a profit with this strategy.
     
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  3. Tekoz

    Tekoz Well-Known Member

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    @skuzy it may be profitable but yes depends on the property cycle.

    For example Schofields in North west Sydney is one of the highest growth suburb +43% this year when I look at the domain RE growth lists.

    I've seen a vacant land in that area went for $700k for just less than 500sq metre.
     
  4. Brian84

    Brian84 Well-Known Member

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    Hi Skuzy,

    I do some work for a bloke who buys up a few blocks of land in a new release and pays the min deposit until the land registers which could be up to 18months, then he sells the blocks as registered blocks or sometimes he sells them as a house and land package as he is a builder.

    He as made hundreds of thousands dollars.

    Middleton grange is not all new estate. I built some display homes for Eden brae when it first opened up probably around 10years ago now.
     
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  5. Brian84

    Brian84 Well-Known Member

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    There aren't many blocks of land left for sale in oran park either.
     
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  6. wombat777

    wombat777 Well-Known Member Premium Member

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    Try and buy in areas that are at the bottom of the growth-cycle.

    Ideally buy an existing block as it can take years for land to be approved, registered and developed ready for building.

    This is the risk you face:

    http://www.news.com.au/finance/real...into-a-nightmare/story-fndban6l-1227516030667

    Just wait for something to pop up back in market and pounce quickly. Less risk you'll waste time and money.

    I was fortunate to buy my land for my PPOR after the builder the previous owner contracted collapsed.
     
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  7. Kael

    Kael Well-Known Member

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    Wouldn't it be best to be looking at land estates in Brisbane about now since it's a rising market?
     
  8. Sonamic

    Sonamic Well-Known Member

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    I've done this several times. It IS important to buy in the early Stages. Ideally in Stage 1, as all releases after that get more expensive. And if it's for an IP you want to be the early bird that catches the tenant worm before the competition arrives.

    My latest is almost built. It's only up 50k over Cost as I waited for a later release to get a wider frontage. Could've easily been more, but you snooze, you lose.
     
  9. skuzy

    skuzy Well-Known Member

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    so when we see blocks of land for sale such as this
    http://www.realestate.com.au/buy/property-land-in-middleton+grange,+nsw+2171/list-1

    would this be considered pretty much last release? how do you determine this?
    Or do you simply go by the media release by various companies

    for example:
    http://www.realestate.com.au/property-residential+land-nsw-carnes+hill-201271889

    which indicates "stage 28 "


    note @Kael - this is not a discussion on where to buy .. more on the strategy of buying and developing via "new land releases " (however that is interpreted)
     
  10. wombat777

    wombat777 Well-Known Member Premium Member

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    You need to dive into masterplans for the estate. This will set out in principle the areas that will be developed and what the usage will be. This should also match zoning so you can also look at zoning maps.

    Detailed planning happens for estates in stages. The masterplan usually just provides a general street layout and usage / zoning, although this can change later. DAs then get submitted by the estate developer for individual precincts (Stages).

    You can use https://www.planningalerts.org.au/ to monitor DAs within a particular radius of an address. This will give you insight into when new stages are about to be released. This might enable you to get your ducks in a row regarding preferred blocks, finance, etc.

    It can take months for stages to go from DA approval to release for sale. Timing can be a guessing game.
     
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  11. wombat777

    wombat777 Well-Known Member Premium Member

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    You need to dive into masterplans for the estate. This will set out in principle the areas that will be developed and what the usage will be. This should also match zoning so you can also look at zoning maps.

    Detailed planning happens for estates in stages. The masterplan usually just provides a general street layout and usage / zoning, although this can change later. DAs then get submitted by the estate developer for individual precincts (Stages).

    You can use https://www.planningalerts.org.au/ to monitor DAs within a particular radius of an address.
     
  12. Sonamic

    Sonamic Well-Known Member

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    See how it says Lot 5512? That's 5511 people that got into the area before you. If you can research as wombat has described, you should be able to get in within the first couple of hundred blocks. If it's on realestate.com it's probably already too late.
     
  13. Kael

    Kael Well-Known Member

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    Of course :) I was just using Brissy as an example for the current property market. I tend to steer clear of land estates after my first investment which caused me plenty of hassles. In saying that, if it was the beginning of the estate, I may have gotten more value from it.

    I've seen new land estates that are fresh to the market and they didn't label them as "Lot 1", "Lot 2", etc.
     
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  14. Sonamic

    Sonamic Well-Known Member

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    Hmmmm. Maybe they do it differently in Qld. Lot 1 seems a logical place to start numbering allotments I thought? But Lot 5512 is either a massive Estate, or they started numbering Lots at 5000.
     
  15. Esh

    Esh Well-Known Member

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    Very interesting. I never thought to do that. But now that I think about it, just two months ago my father in law purchased land. I think it was stage two, for $880,000. Just found out last night the next stage will be priced in the $1m range. They are bid blocks, about 2000sqm. Never thought about it as a strategy
     
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  16. Sonamic

    Sonamic Well-Known Member

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    @Esh
    In 10 years time cut it in half and sell 1,000 sqm for 2 mill and pay out a Mortgage or 2. :p
     
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  17. Esh

    Esh Well-Known Member

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    Yes that would be amazing but I doubt he will be holding it for that long! @Sonamic
     
  18. Jeffb

    Jeffb Active Member

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    that most likely means stage 55 or stage 5.

    Some recent estates I have been involved with go: stage 1, 101-120. Stage 2, 201-220... Stage 12, 1201-1220, etc
     
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  19. Tekoz

    Tekoz Well-Known Member

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    @Sonamic so who's going to rent the grassy lot ?
    the farmers ?
     
  20. THX

    THX Well-Known Member

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    That's not how lot numbers work. 5512 would mean there are 11 other lots in the sequence starting with 55 which could be the stage the estate is up to.