Why land price are so high $600/sqm

I was just going through land rates of new releases in Melbourne north.

I was just wondering what makes land so costly to price at 600 per sq meter.

Some one in building industry told me it is about $75000 for land developers to prepare one lot and rest all are profits shared by government and or land owners .

What are actual land development costs given , no additional roads or trains are made in near by future for next 20 years.

Is it true that government makes land cost so high intentionally ?

 

Also need to consider the cost of acquiring the land. One of the developer acquired land for 1500 lot for $91k - that's before any work being done ~ $61k per lot, plus the land work, add profit on top.

 

Developer has to pay to build the roads, foot paths, electrical/water/gas/phone/data reticulation, street lighting etc all upfront whereas years ago this was all provided by the utility companies and amortised over 40+ years.

When you buy, you expect all of these to be in place on day 1 (and someone had to pay for them).

 

More like $100k a lot inc DCPs GAIC Civils and landscape. Then there's a little thing called acquisition costs inc stamp duty. Oh yeah then marketing, finance and more tax GST and Income Tax. Low and behold for all this outlay and risk the developer wants a little profit.

 

Yep and don't forget 1ha park every 400m that cost $1m to build.

 

Don't worry the system will collapse, it's a rotting apple tree and the economy will shake it and all the rotten apples will fall down.

 

And then the worms will really come in...

 

Beware of the Goverment that artificially maintains or ramps up prices by limiting land supply and infrastructure.

Beware of the banks that provide endless cheap credit at low deposit requirements under variable interest rate set ups or low periods of fixed rate terms to ramp up prices

Beware of the real estate agents and the mafia like way they operate to ramp up prices.

Beware of the foreign buyers ramping up house prices.

Beware of the private debts of Australians all being on mortgages and being far higher than GDP.

Beware of the goverments and councils that rely on stamp duty and property taxes on properties to keep themselves afloat.

Because all of the above will result in in deep poverty and no jobs and a devastated economy that will not recover without a revolution that will be violent and heartbreaking.

Greed will crush your hearts and break your dreams.

Goodbye.

 

not this again

 

Let me guess. You had the chance to buy when it was affordable but didn't and now regret it?

 

No it won't. Being forced to work till 75 and then rely on a sh***y pension to try and make ends meet after giving your life away to an employer who allows you 4 weeks annual leave will. Hell no! F*** that.

 

And land prices in new estates in South West Sydney are easily over $1000 per sqm, $600/sqm looks like a bargain to me

 

Not sure of the sqm rate, but a block you can build on will be relative in price to an established property in the same area.....Otherwise property investors would snap up all the land, build and rent out or resell.....

 

Yes my friend called me today from Sydney and told same thing. Sydney is land of rich people now

 

Can you please explain with example. Do you mean I should pay rate comparing with established property rates ?

 

New estates in Sydney are getting well over $1200-1300 M2 for land. And these are 40-50KM from the city

 

You can pay whatever you like, I'm just saying that in a marketplace, the price is referenced by the other sellers. Your not buying a square metre of land. You are buying a homesite and the other sellers in the market are selling theirs at a price. Take their price for an established house nearby. discount it to remove the old house they have on it, increase it because of the amenities and perhaps backyard size and then divide it by the Sqm and then you have a comaparable price. Does it seem cheaper than the blocks you are looking at? Buy established then!

 

Wha ???? Are you *really* surprised ?

We will get the lecture even if we started to sing from the same sheet, it was funny, but is starting to ruin many threads and get a little tiring.....

 

yeah, 600 ? I remember some guys over a year ago snapping up as much as they could in the SW at over 1500/m

600 is not too bad, depending on where it is, how far out is the land for 600 from the CBD & approx travel time ?

Remember the land cost to start with and all other costs as mentioned above + profit & demand = cost, it will drop somewhat when market cools.