Highest Returns in Perth and WA for Developments

Cannington would be great at 28%
also approx year of purchase


thanks

 

Im suggesting that 2 apartments don't have to be the same. there indeed is an oversupply at the moment, in some areas more than others. there is definitely an oversupply of average product.

that being said the economy isn't doing so badly that absolutely nothing is being bought and there are no buyers.

I do think that if you're being smart atm, producing an excellent product and being right and conservative with feasos that it is possible to get a good result. as an example, the perth/highgate project I finished last year for a client has had so many unsolicited offers, just 2 weeks ago a friend of one of my tenants asked me if the owner would sell as they had not been able to find something comparable.

buyers are being rightfully picky, for so long they have been underserved by lazy and unimaginative designers, builders and developers. how many badly oriented, badly designed and ill performing "high specced" villas got built in that mini boom we had in devvy sites a couple of years ago? far too many because you could have taught a monkey to make money in that period from small developments.

in the current market that isn't the case. sometimes we need to create a better product and sometimes we need to not go ahead with a project, either way it requires property thought and DD which is a good thing imo.

 

come on Aaron those 3x2 have made me money some people like to live in these, they are here to stay IMO

could be worse, tiny shoe box apartments

 

So were the returns you posted in the original post in the current market?... or x years ago?

 

You seem to be taking this personally, I wasn't referring to you at all. doesn't matter if it's a 3x2 villa or a tiny apartment, it isnt the product I'm talking about. it's the approach.

yes villas are indeed popular with many, you were absolutely right to build them and capitalise on a hot market. what I'm saying is that now because of the state of the market more thought, innovation and effort has to go into it.

you're right, villas are here to stay but for now high margins on cut and paste villa developments are not.

many of the projects that went up a few years ago were a perfect lesson in mediocrity yet yielded high margins. that breeds laziness and doesn't encourage higher standards.

it's like with say hospitality, people often wonder why standards are so high in mid tier melbourne venues, it's simply because if they aren't good they will go out of business. perth 10-15 years ago you could sell really average food and make good money, nowadays you can't so standards are higher. I want the same thing to happen to the property industry here

 

Look, that's my edge and personally I'm happy to give away processes and insight into things but this crosses the line into 'intellectual property'. If I blurt to look great in interwebland, every search engine in the world picks it up and my edge is gone.

Loose lips sink ships.

I changed the typology of home, still no more than 2.

Similar process to changing a 3 bed into a 4 bed in a family area.

 

i'll take that as a compliment!

 

yes, I get your point



I know an investor who is going to make a killing in Willagee because he can fit 5 townhouses on the block. His feaso numbers are very conservative and he will make minimum of 30%.

He was very clever, purchased a block no one wanted due to massive slope, however he saw the potential that people like me missed.. He will take advantage of the slope by building townhouses

 

shame about that

 

i'm happy to PM you Marisa. I just don't want it Google-indexed.

 

no, not at all, I am poking fun at myself really, that's the problem with forums it's too easy to get it totally wrong, I do it often. Not at all offended

 

thanks that would be great

 

ok no worries thanks for clearing that up

 

PM sent

 

@sanj - I agree and hope you are right.

Unfortunately though developers need to build what will sell - which is also largely what is popular.
Sometime the market demands the 'high-spec-cooky-cutter-crap' product. Even when as developers we could build and deliver much more, at a very marginal cost. However, the market just won't pay for it, or the council just won't approve it.

I'm not saying it can't be done, but in Perth especially, I think the market has a long way to come before we see any really significant change (look at the double brick argument as an example).

I'm not sure what drives what. Do developers drive the change, or does the market?

I for one would love to see double frontage garages outlawed. But try and build something without a double garage... The market cooks you.

Blacky.

 

kinda - depends where you are.

i had an interesting one years ago where it was costing a packet to build over the garage as a double.

realised a single garage would save a bajillion and if the product was right, the market wasn't penalising you for it if the price reflected it.

turned out the price difference was also a bajillion.

so it came out square.

 

Thanks Aaron , if your good at something then why give it away for free

I have heard that argument many times by many people that many of you make about standard cookie cutter crap. Unfortunately many of us dont know what the market really wants and we just do what every other developer is doing. Im guessing that you would need to team up with both a really good designer @Aaron Sice AND also a local RE agent as the agent knows the local market very well and knows what people want and will pay for. I was speaking to a gun of an agent in Dianella and he is happy to work with you on the plans including layout, spec... if he can get your listings. I have seen these villas he sells and they are one step ahead of everyone else and fly out the door for top dollar. Everyone wins.

 

agreed having the right consultants be it officially or unofficially is very important, from architects/building designers to agents and everyone in between.

ultimately though they need clear direction from u so responsibility to make major decisiona ultimately lies with the developer and so it should since the profit goes there as well. as an example, @Aaron Sice did a really great job on 2 projects of mine, one of which was very unusual (all 9 star rated, rear block facing laneway, super tight site, very high ceilings up to 5 metres and a whole bunch of other stuff). it meant that there really were no comparables at all or proof it would work but working together and with a few other key consultants we got a great result not just in terms of end product but financially for my client as well.

like you said knowing what the market wants and delivering it is key and if the current tough market leads to more people really trying harder instead of copying other developers then it's a good thing.

@Blacky I get what you're saying and there's definitely some truth to it. the thing is even "standard" can be better and it doesn't need to cost much more at all. what is and isn't standard evolves, hopefully in a few years these abomination of luxury high specced black tiled roof meh villas will not be as commonplace for new developments.

the market is evolving and buyers are becoming more educated and savvy. for the first time I can remember (apart from worst of gfc) finbar are finding it hard to sell their cookie cutter product. also, i

 

Yeah guys, I have trying to say they're recent except for Port Hedland.

 

The 28% came from getting a "two unit site" at the price of a two unit site and building three units by taking advantage of R Code plot ratio concessions for single bed dwellings <70sqm. The third unit being the single bedder.

Built in the exact same footprint as two 3x2's except now there's a 3x2 a 2x1 and a 1x1.
Bought in 2015

Don't confuse this for granny flats/ancillary dwelling because it's not.