Nathan Birch "dumping" properties according to Macrobusiness

Potentially, yes. However, with potentially many loans reverting to P&I, that would be a real cashflow killer. Strategically selling down now near the peak of the market is better than the banks controlling the sales later when prices may ease. There is some hit with capital gains tax but the advantages outweigh the cost. He's getting into development now which requires cashflow and capital.

 

I'm no developer but isn't the best time to get into development in rising markets?

 

Definitely the best time to get into development is rising markets. Where is he planning to develop?

 

Yes more risk if you are at peak and in middle of developing

 

Or at the peak and starting to develop now. Risky. I would look for markets that are rising (Brisbane, Hobart, Newcastle?) or likely to start rising soon (keep an eye on Perth).

 

Or alternatively you must pick up blocks at a killer price where end values have considerable fat

I am waiting, I will develop in Perth when it makes sense

 

Not necessarily. That market is more like CIP in it's price flutations.
And there's always some people who over extend themselves, which is easy to do when thinking way ahead.

 

To be honest NB doesn't interest me anywhere close to what these 3 guys do:

Rich List 2016: how a trio of young property developers can defy the downturn

 

There's a lot missing from those stories.
Either they are 2nd or 3rd generation sitting on lots of under developed land, or have some access to lots of cash & finance that very few have.

I doubt the banks would be repeating the Bond/Skase years...though it's not impossible

 

Not necesarily...I've come across a fair few developers/development managers who always told me the same thing "money is made from property when you buy, not when you sell"

Best time to acquire development sites is in downturns when no one can get finance for projects. Look at Harry, he got as big as he did in the late 80's recession and bought up big on CBD sites that no one else could buy.

I imagine there would be many people on here who have seen this coming for months if not years, reduced their debt, cashed in, and waiting on the sidelines with popcorn in hand waiting to snap up the spoils of a downturn.

 

is it really that simple though? I know countless people (ok, a few) that are currently living at home or in share housing that would jump into the market if it dropped or stayed flat for a few years. This would add to the OO numbers whilst not freeing up any rentals

 

That's where financial environment (will they be able to afford the tighter repayments/criteria) and market psychology comes in.
Why do share markets plummet the way they do? Fear. (And liquidity)
If they haven't bought yet - do they have the galls to purchase when headlines are "market crash, no end in sight, is brick and mortor really safe?" Or even worse - no headlines at all!
Some may, some won't.
It's why some price levels hold and others don't.

 

Is it worth developing in Perth vs just buying existing cheap and then holding / renting / onselling?

 

That is called pent up demand and is thought to be one of the main reasons fir the current Sydney boom starting.

 

I haven't seen any sites worth buying to develop now. That doesn't mean that there aren't any. I suspect your best bet may be to find a new/newish build that is well priced but below replacement cost. We have been talking about this strategy in some of the Perth threads. It seems like a sound strategy to me but would depend on the particular deal stacking up of course.

 

That is unlikely, the same people that moaned to me about housing decade/s ago are doing the same thing, only one bought that I know about 4 years ago and I no longer get talks of how renting is cheaper (therefore better) than buying.

If they wanted to buy if it was flat, they would already be in, if they wanted to buy and was to expensive where they wanted to live, they would have bought where it was cheaper and in range for them.

 

its not unlikely
keep in mind there are people graduating uni and getting jobs/a means to buy a house all the time etc (and have not yet had the opportunity to buy in a flat market, as you suggest they have)

 

He regularly posts short videos on his Youtube channel spruiking his business.

 

Yeah, sure, a handful of new people looking to get in, this will not take up any changes.

There are not hordes waiting by the sidelines to get in, it is not that hard to buy unless your going for something out of the ordinary.

 

I would anticipate that he has multiple entities....therefore multiple CGT discounts, reducing the overall tax considerably.

I believe it's the smart way forward. Keeps your cashflow flowing & strengthens your position for a downturn.

Love him or hate him, he's no dummy. If he's developing, or planning on doing it later, you can bet he's picked up some nice land during the downturn.....or he's preparing to do so during the next one.

Yup!