R40 - 776 sqm (zoning ratified)

While new at this stuff I would attempt to look at what prop type were sold over the past year: House(71 %) Unknown(22 %) Villa(3 %) Townhouse(2 %) Other(1 %) Unit/apmt(1 %) of which house prices were Median Price $550000 & Average Price $581000
Currently there are 44 houses available and very few villas/town houses on the market. The majority of houses are 3 bedrooms with some 4 bedrooms priced between $500k - 700k.
Properties with 700sqm land sold for >$550k and currently 2 property available at $600k - 700k.
Thus you already made your profits in the land (say 600-150 = 450k. Adding dwellings wont necessarily add additional value (except if you are a full-time builder with a team). But if you subdivide (R40) and sell the 3x blocks @ 220k seperately you may improve your profits further with an extra 510k-450k=60k. However this may take a bit of time as villas/townhouses arent high in demand...perhaps because they not available. Wont know!

Also if you construct and intent to keep the dwellings as an investment, then after a few years your profits, due to capital growth, may look even better.

 

hi Marisa,

a bit late to the thread. i have a feeling that you are looking at this project more from emotional side (fear of current market) rather than purely a numbers game.. as someone has mentioned (i believe sanj? ) have you done numbers for different scenarios?

also, my personal opinion is willagee nails it on location location location, so worst that can happen you hold on to it a bit? just my 2 cents.

 

Thanks I think you could be right, I am very bullish about this area, nice to get your feedback

Cheers
Marisa

 

Back to just looking at values in Willagee (3x2 in terms of what is selling today, there is a vast difference depending location, size, age.

Here is one listed recently, good location, however older, carport not double garage, however larger block component, weird shape block.
49a Wheyland Street Willagee WA 6156 - House for Sale #121617086 - realestate.com.au

Another, larger 3x2, on smallish block, but well designed, not in desirable location. Spoke to the agent he is out of area, I know him, good agent, he basically said the selling price has taken location into consideration.

17b Harfoot Street Willagee WA 6156 - House for Sale #121631034 - realestate.com.au

I am researching 2x2, townhouses, wont stack unfortunately

The good news there is a demand for 3x2 in this area for downsizes, will keep you posted.

Marisa

 

Just don't chase your losses or try to "make up" for previous ideas.

The market just ain't coming to the table at the minute for anything over median.

 

I have held two potential development sites long term and they were both cash flow negative.

 

Totally agree with you, there is way too much uncertainty in the Perth market at the moment. I have another project in Melb and I will be building townhouses on this. I think I will buy another in Melb and sit on Willagee.

Perth in general is just not looking too great at the moment.

MTR

 

Scheme Amendment No.71 was published in the Government Gazette at 12.00pm today. Effective immediately, the zonings/density codes in Scheme Amendment 71 have the force and effect of law. A copy of the Amendment text is attached, with map. Copies of the Amendment are also available for viewing at the City of Melville Civic Centre

 

@Big Daddy you beat me to it =P

 

Wooohoooo!!

 

I for one am looking forward to all the 4m driveway easements about to hit the back of Leach Hwy lots.

 

@Oshawott is going to do one.

 

Please explain. I though it was all the arkwell lots that needed a easement for the leach hwy lots (if arkwell wanted the higher r60 code) and not the other away around

 

From my understanding is all lots (leach and arkwell) required to have the access easement if you want tge higher zoning. The idea was that by having accessway front lot to back, you create a road away from leach hwy. I hope that makes sense tano

 

Hi Guys

now we have some of the 3x2 villas that have hit the market in this area.

The hard true fact is they will be well below what I would have expected from the research I conducted for this area at the time.

Without comparable sales for the area you are limited to looking at the surrounding areas, this combined with perhaps a 10% drop has not helped.

These villas on the market are not in the most desirable location, however they also have a threatre, so they are larger than what I would be building.

This is most certainly an eye opener. Looks like I am land banking until the Perth market changes. Fortunately on recent rent review the tenants signed up and did not request a rent decrease very silly

1/8 Bastian Place Willagee WA 6156 - House for Sale #122562130 - realestate.com.au


MTR

 

It may have a theatre but that is a very ordinary standard house. 28 course ceilings, vinyl floor, metal laundry trough cabinet, no overhead cupboards in kitchen, no door to WIR.

I would expect that a nicer spec in a better location would fetch more.

Have you thought about getting DA now so that you are ready to go to site when there are signs the market is swinging back up?

 

Absolutely very ordinary, but at $540,000 that is a front villa, other villas are selling at $520,000,

I think even with higher specifications you would be pushing to achieve $550,000-580,000 considering you don't have a threatre.

In a buyers market they can continue to screw prices down, they are not sold yet.

MTR

 

That's actually a much worse location than the eastern "high" side of Willagee - I would say it makes a big difference to locals and those who know the area.

 

I think it goes to show that if a developer puts "more of the same" on the ground, they can expect "more of the same" come sales time.....and yet suggest something "not the same" to add some interest and value at no extra cost and people lose their ****?!

does anyone on here know the owners of that development?

 

I agree with you, better location high end value, the issue is in this market even well located properties have dropped perhaps 10%.

As a small developer the question is do I risk building with the belief that I sell these for guestimated price because the location is great and I will build nice high spec villas........ knowing that the market is still falling?

Personally, this is a risky proposition, even if I was not selling, valuations across Perth are coming in much lower.

I have looked at many options for this site that have been mentioned in this thread and they are either not suitable for the area or don't stack up unfortunately.

I can service the debt so I think its back to land banking.