Property Development Tip 2: Treat Property Development as a Business!

I agree Adelaide is a flat market in terms of capital growth but feasibility on a development site factors in resale value for the area in the current market as is - there are still some good areas with good returns on development potential.

Beach suburbs, eastern suburbs have high resale values for new dwellings.

The value is in getting the numbers right and knowing the area and you can do that in any market.

 

Thanks Xenia what entry level-range for these areas you mentioned? Also what price point sells, pm me if you prefer

 

Typically $600,000 w to $1million e depending on where you are. We just sold a development site - house with cracks in it for $850,000 in grange - pre- open inspection no advertising, no boards we didn't even get to list it.

It will be knocked down and 2 new Torrens title dwelling built.

If that was northern suburbs the listing would sit there for months waiting for someone to come and pay a measly $200,000 - they don't move as quick in those areas.

West and east in Adelaide are land locked by the sea and hills respectively so values cannot be diluted by releasing new land. Urbin infill - fitting more on the land - georgraphically poised for capital growth.

West has a more appealing entry level - $6 -$700,000 range as compared to $1mil plus for east at same distance from city.

South is ok - far southern areas are cheaper than west or east and some areas have sea views and still in the cheap range.

Northern suburbs - urban boundary can shift and new land release can oversupply stock - we have some option contracts on the rural area of urban boundary but I personally would not purchase anything north of North Adelaide.

 

This is very interesting and valid points regarding objections etc. Thanks for the info

I just realised I have had 2 objections on a development which I put together but it was about 5 years ago in Melbourne.

The neighbours on each side contacted me wanting to know if I was interested in buying their properties, once they realised I was not going to buy they both placed objections to council, it was 8 unit development project in a court.

Council basically dismissed these 2 objections, I think they were trivia really, can not even remember what the objections were, my architect dealt with it.

MTR

 

No, only superior to Perth (as per the stats earlier). Theres no denying that Melbourne and Sydney have had a better run than Adelaide. Likewise theres no arguement that Perth had a good run, but looking at it over a 3 year period to date (your choice in dates/timeframe, not mine) Perth has performed below Adelaide. Please don't start with the lines "theres markets within markets", or " I develop - I create my own market" because both of the phrases can be applied to any city.

I get it, you don't like Adelaide. Every time someone mentions the city you devote a lot of energy into ensuring everyone is aware of where you stand on the matter. However I would appreciate it if you recognise that it is your opinion and many people out there have a different one. In this particular example I have provided you with statistics that show a different scenario to your opinion and yet you still keep making generalised statements contrary to the facts.

Ironically enough I've made more money in Perth these past three years than I have in Adelaide and yet I am still concious of the facts (rather than letting my judgement be clouded by my personal bias towards the area that I am making money).

Anyway, I'll bow out at this stage of this discussion. I don't think either of us are being served well by continuing this robust discussion.

 

I was not the one who raised Adelaide, derailing the thread.

All good, now we can get back to topic - development tips.

 

Yep I sure did - I pointed out that Adelaide fits the criteria that you mentioned. To be honest I wasn't expecting to have to defend myself so vigorously. But I was happy I was able to provide some actual facts just to clear up some blanket statements that were made.

Thats what its all about right - making deicisons based on facts and numbers? Atleast thats how I manage my finances. Beats listening to the REA telling me that it just so happens this particular property is the best valued house ever!

 

Happy you are happy with your stats

Now can we get back to the topic, some people are interested in developing.

 

Any further updates Chirag?