Schofields property purchase

Discussion in 'The Buying & Selling Process' started by dnalost, 9th Aug, 2020.

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  1. dnalost

    dnalost New Member

    Joined:
    9th Aug, 2020
    Posts:
    1
    Location:
    Sydney
    Hello Everyone,

    I am about to get into a house and land package for a property in Schofields. Upon looking at the land contract, I realised that there is a power transmission line of 330kv just behind the area. During the land rezoning, the builders would be constructing a park in the area above which the line passes (easement). It also means that the property that I am buying would back onto a park, which I consider as a good thing as there would be a lot of open space there. The land is outside the easement area and I am also planning to do an EMF test to see if there is any impact due to the transmission line.
    I would like to get a view of what you guys think about this?
    Share your views if you have had any similar experience or know the area.

    Thank you
     
  2. datageek

    datageek Well-Known Member

    Joined:
    18th Apr, 2017
    Posts:
    229
    Location:
    Australia
    Hi dnalost,

    I don't think EMF will be a concern. Council wouldn't permit subdividing blocks for residential development if it was. But it's diligent research to double-check.

    The big problem I see is that Schofields has a high risk of infill. If you look at satellite imagery on Google maps, you'll see a number of housing estates under construction. And there's loads more vacant land that could be developed in the future.

    You could check the local council website to try and gauge how much additional supply is about to come onto the market. It should be safe if there's nothing much planned and you're strategy is for a quick flip. But if you plan to hold long-term, that whole area could have sluggish growth if council open the floodgates and developers go crazy. I'm not saying they will. I'm just saying there's a risk they could.

    Supply is only one side of the equation though. If the demand is significant, it will overwhelm an unusually high supply rate. The current demand to supply ratio for Schofields houses is 51 out of 100. The national average is 52. So, it's already a bit on the ordinary side as far as growth potential is concerned. The DSR+ has been below 50 for all but 5 of the last 36 months.

    Also, buying a new property is not a great idea if you plan to hold long-term. If you plan to build your own property, that is, you're the developer, then that's fine. Just be aware that new property has a strong tendency to under-perform due to high rates of depreciation. You're paying for "newness" and that evaporates over time. Only a portion of it can be claimed against tax.

    Best to offload early and go for the stag profit like the developers do rather than hold long-term for that sort of stock.
     
  3. rastha2000

    rastha2000 Active Member

    Joined:
    26th Feb, 2021
    Posts:
    34
    Location:
    Schofields
    Hi datageek,

    Great content!

    I'm also looking forward to buy a land to be released in 2023; hoping to resell it with the capital gain. I feel like Schofield, Box Hill is in high demand (by now) and per square meter value is reaching 1,800 AUD. So I started researching new developing areas to do the same.

    If you were in my situation; what do you do?

    Thanks
     
  4. datageek

    datageek Well-Known Member

    Joined:
    18th Apr, 2017
    Posts:
    229
    Location:
    Australia
    Hi rastha2000,

    I don't have much data on land markets, so I'm not much help unfortunately. But I can say that for house markets, Schofields seems to be the best of an ordinary lot. It's also slightly closer to the housing hotspot of Blacktown. So, perhaps some of the heat will ripple over.

    I think you really need to research the developer releasing the land very carefully and be wary of the difference between "marketing" and truth. Perhaps you can gauge demand by how quickly new releases are snapped up. And then compare that number to the total number of lots they'll eventually release.

    Not much help sorry.
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    The EMF isnt likely any scientific concern. The visual blight and buyer views to land affected by powerlines may affect value however. I would consider another lot somewhere unaffected by retention basis and powerlines. Have you visited at a time hen light drizzled rain is falling ? Its quite loud and somewhat disturbing.
     

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