House and land deals Perth

What so people think about doing house and land deals in Perth as part of current property cycle ?
Previously I followed other posters, esp Sash ( where has he gone by the way ?) who did lots of h and l deals. Lots of others did this and made good money in vic during previous boom,
Which areas would you recommend for h and l package ?
Any issues with turn around time with building at the moment in Perth ?

 

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@Shogun
This is @MTR s company, right?

so 2/3 ply means a subdivision site?


Cheers

 

No westminster

 

My observation is that parts of Perth are heating up
Most of the locations where there are new land releases are not heating up yet (generalisation though).
Considering the 45/55k grant is now down to 15/25k and soon to just 10k( for fhb) and is a considerable component of the land im not too sure

VIC was a long term heated property market when sash was buying. If that happens in Perth then maybe. Just remember at the time in Melb you could throw an arrow at a map and make $$$

 

Sydney boom was the same, didn’t matter where you bought , prices went up consistently.
I bought in girrawheen in 2013, it went up 100k at least in 1 yr then plummeted,,,,,now lucky to almost break even. Which makes me scared of Perth as it tends to be boom bust.
As to to buying development sites, I have no experience with this and seems like a lot of work.

 

@Westminster

 

Girrawheen went gang busters as the area was rezoned and government was selling off State housing stock. I also purchased 3 properties in 2013 in Girrawheen, and offloaded just prior to peak. It absolutely got hammered
Unfortunately due to low end values, I dont believe the numbers stack up for development why I offloaded. Was lucky as I made profits with all 3

This was a very short boom cycle started in 2013 peaked in late 2014. Also government increased FHB grants so this market also went nuts

 

You hit the nail on the head..... all of Melb was booming and you could throw a dart. Has happened in Perth too in previous boom cycles

L and H can be very lucrative in rising markets. However when its a hot market it takes much longer to build and build prices go up. I found you can miss out on opportunities by just buying established and no build time. Markets can also turn during the build, generally takes 18 months to build

When it crashes you tend to have the same cookie cutter product in new estates much harder to sell, my experience


I prefer to build/develop where there is infrastructure and land is scarce, and minimum of 2/3 on each site, less risk

Developing is not hard work, the challenge is sourcing finance and the site

I think Sash strategy is to build on smaller land component, new estates, some regional centres Vic, max size of home for top rent and depreciation . I think around 6% gross yield and never sell

 

There is huge issues with turn around time at the moment. There are people who signed up mid last year that don't have finished plans or gone to site yet. Construction prices have also gone up.
I would be very wary believing anything a H&L builder told me at the moment

 

That was me.
I was referencing toilet paper. So one ply toilet paper is not good, cheap and thin. You want to wait for the 2 ply or 3 ply toilet paper aka a good project that has good fundamentals, strong feasibility

 

Thank you all for your Input. When i search there are so many blocks of land subdivided and sold/selling in Perth everywhere ....this is much different to Sydney....so there is going to be a lot more construction happening at one time given the number of vacant sites I see...and as you said a backlog in waiting to build. And I guess with COVID borders, it’s not like you can have extra builders from other states move to Perth either.
Hopefully this boom lasts longer, fingers crossed as I’d like to finally get some profit from this girrawheen purchase.

 

Why would you consider some potentially dud products with extra risks, when you could just buy something with better prospects and already established?

 

I also believe the grants for new build gone now, deadline 31 dec 2020

 

Fed grant of 15k is still their (for PPOR) which was 25k until 31 dec 2020

 

Ok thx

 

Actually there isn't that much vacant land available compqred to 12mths ago. Newly subdivided blocks are still being snapped up quite quickly.

Trades have been moving here for work but it might not be enough, especially considering how different Perth construction can be to what they are used to. There is also a rental shortage so they may find it difficult finding something to rent when they get here.

It is more rare in Sydney to find an infill block because their system seems to prefer construction subdivisions where as Perth can easily create a survey strata or green title block.

 

Girrawheen both Perth and Sydney have suburbs of that name. Both mentioned above?

Look at what end values sell for. I haven't looked at Girrawheen but "developers" like to lose money in surrounding suburbs. Pay too much for the land and have to sell too cheap too move their product.

 

yikes ..... not so.... a different end value for surrounding suburbs, beach side of wanneroo road. Median prices are $150,000 more


Same sound... but Different spelling in Syd, take H out girraween nsw

 

I just remember it's the "G" in KGB