NSW Newcastle Property 2017

Discussion in 'Where to Buy' started by drg86, 4th Jan, 2017.

Join Australia's most dynamic and respected property investment community
Thread Status:
Not open for further replies.
  1. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    Never start developing when cycles are close to peak, land has soared, easiest way to lose money

    End values can fall back considerably
     
  2. Skilled_Migrant

    Skilled_Migrant Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    796
    Location:
    Melbourne
    In a similar dilemma...Have plans approved for a subdivision...but the values of house/land has risen more than the units. So might end up with the same profits (as those at the beginning of feasibility) if on sell with the plans without constructing. Saves about a year or two and jumping through hoops for loan and construction.

    On the other hand wanted to keep 2 of the units, would be CF+
     
  3. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    Easy sell:)
     
    Skilled_Migrant likes this.
  4. samiam

    samiam Well-Known Member

    Joined:
    5th Sep, 2015
    Posts:
    2,126
    Location:
    on my way
    Still good buys around? I know it's all relative and how you look at it
     
  5. lightbulbmoment

    lightbulbmoment Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    959
    Location:
    nsw
    No , no real bargains but hope i get this one.
     
    samiam likes this.
  6. lightbulbmoment

    lightbulbmoment Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    959
    Location:
    nsw
    Good money to be made on townhouses in Newcastle @MTR should of bought a site 3 years ago. This one is ten kms from city
     

    Attached Files:

    MTR likes this.
  7. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    I was developing Townhouses in Melb got in beginning of boom, now townhouses in USA.
    Well done to those who jumped in at the right time
     
    Last edited: 26th Nov, 2017
  8. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,386
    Location:
    Sydney
    Does anyone know much about Teralba?
     
  9. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    15,605
    Location:
    Sydney
    Aahh....that is the best time....that is when the fun starts...a few here are doin' exactly that.....
     
  10. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    Really, let me know what happens on completion:p
     
  11. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    15,605
    Location:
    Sydney
    That is a "fait au complet" ..... the precursor of heightened sensitivities is a dead giveaway....
     
    MTR likes this.
  12. tomlemke

    tomlemke Well-Known Member Business Member

    Joined:
    21st Jun, 2015
    Posts:
    950
    Location:
    Newcastle
    Lake side suburb, not a lot happening. Lower socioeconomic demographic.

    Investment wise plenty of better spots to invest in,
    I wouldn't be putting my money their.
     
    PJ1 and larrylarry like this.
  13. beertank23

    beertank23 Well-Known Member

    Joined:
    16th Feb, 2016
    Posts:
    149
    Location:
    Newcastle
    100% true. All I'll counter with is big blocks, some flat ones, some close to a river. Close to Warners Bay and the lake. I guess what I'm saying is if you wanted to buy a sh*itbox, knock it down and put up 4 town houses, you'll sell them off easily.
     
    tomlemke and larrylarry like this.
  14. CiscoSky

    CiscoSky New Member

    Joined:
    16th Dec, 2017
    Posts:
    1
    Location:
    Sydney
    Hi guys, I'm looking to buy in Newcastle region with a budget of $550K with SMSF, Where do you guys recommend and why? Thanks in advance :)
     
  15. TylerJamesson

    TylerJamesson Well-Known Member

    Joined:
    15th Feb, 2016
    Posts:
    409
    Location:
    Australia

    I bid on 124 Lindsay Street on the weekend into the low 7's. Thought I might be able to get myself a good buy before Christmas in a good location for a potential duplex site. House was for demolition, deceased estate, lady died in the home so paying land value only.

    Sold under the hammer for $782k to another developer.

    124 Lindsay Street, Hamilton

    124 Lindsay Street, Hamilton NSW 2303 - House For Sale - 2014041432
     
    tomlemke likes this.
  16. Doculus

    Doculus Well-Known Member

    Joined:
    1st May, 2016
    Posts:
    70
    Location:
    Newcastle
    Interested to hear your take on the numbers? I am thinking that it wouldn't be a very profitable development if a duplex was built as it would yield around 15% ROI. Bank would be expecting around 25% return. As site does not appear to be 15m wide, there would be no option to fit more on site. Only way of reducing build cost would be to engage a spec builder like GJ homes (as they did for the build 68A Dumaresq). This could reduce costs by $200/sqm and increase profit by $72k and ROI to 20.2% which is more respectable

    Let me know your thoughts about my figures? I am relatively new at development. What incentive would there be for a developer on these returns?

    COSTS
    1. You would be up for around $825k including stamp duty and legals, so that is $412k / site.

    2. Assuming you build two basic 3-4 bedroom town houses @180sqm the building costs would be min $720k ($2000/sqm)

    3. Site costs: assuming a flat site - $20k in total ??

    4. Torrens subdivision costs - $20k (not sure on this one)

    Subtotal 1+ 2 + 3+ 4 = $1,585,000

    5. Add Interest (5%) on holding costs for DA process, build, and sale over 12 months = $60k (Based on incremental drawdown over 12 months)

    TOTAL COSTS: 1+ 2 + 3+ 4 + 5 = $1,645,000 (not including selling fees).



    REVENUES (based on comparables below)

    Nb not easy to find a recent comparable duplex that has sold in hamilton. 68A Dumaresq is the closest build form but admittedly 2 years ago. Allowing for 20% increase in that time, it wouldn't be unreasonable to expect a sale of around late 900s? E.g. 975k.

    TOTAL REVENUES:
    2x 975k = $1,950,000


    GROSS PROFIT:
    TOTAL REVENUES - TOTAL COSTS = $1,950,000 - $1,645,000 = $295k

    NETT PROFIT: GROSS PROFIT - RE FEES (2.5% sale price) = $295,000 - $48,750 = $246,250

    ROI: $246,250/$1,645,000 = 14.9% ROI.



    Comparables:

    $790,000 (3 Bedroom T/House)
    7/113 Cleary Street, Hamilton
    Sold on 23 May 2017

    $734,500 (4 bed T/House)
    5/113 Cleary St, Hamilton
    TownhouseSold on 16 May 2016

    $810,000 (4 bedroom Duplex)
    68A Dumaresq St, Hamilton
    Sold on 30 Nov 2015.
     
  17. Doculus

    Doculus Well-Known Member

    Joined:
    1st May, 2016
    Posts:
    70
    Location:
    Newcastle
    Good to hear. We all need to become experts in a range of domains in the development game if we are to succeed. Feel like I am still an apprentice.
     
  18. George Smiley

    George Smiley Well-Known Member

    Joined:
    12th Dec, 2017
    Posts:
    604
    Location:
    Sydney
    Same here, except my budget's around $100k less so I'm looking at units.
     
  19. Doculus

    Doculus Well-Known Member

    Joined:
    1st May, 2016
    Posts:
    70
    Location:
    Newcastle
    This exact thing happened to me in 2001 when the market was screaming along (much like now). Biught the house for $120k, spent $40k on a reno and sold for $230k 9 months months later.

    In that market could have sold house for $190k no worries and made the same money. Did that job for nothing!

    Lesson is: ALWAYS FIND THE BEST USE OF A SITE AND CALC OPPORTUNITY COST!

    Admittedly, it was difficult to predict such a meteoric rise in price over the time, so I am not too hard on myself about that one.
     
  20. lightbulbmoment

    lightbulbmoment Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    959
    Location:
    nsw
    Good post two more duplex builds on dumaresq which are good comparables
    https://www.google.com.au/url?sa=t&...FjABegQICRAB&usg=AOvVaw3DX5KQRYtZMOGZA_jCg5ZJ

    https://www.google.com.au/url?sa=t&...FjABegQICBAB&usg=AOvVaw2c_PheCwYB7Zinvj8BcdFD
     
    Doculus likes this.
Thread Status:
Not open for further replies.