Would you buy in Farley or Thornton?

Discussion in 'Where to Buy' started by Anjohn, 1st Mar, 2020.

Join Australia's most dynamic and respected property investment community
  1. Anjohn

    Anjohn Well-Known Member

    8th Jun, 2019
    Hi, I’m currently looking to purchase a block of land to build a Duplex and then sell both units. There are 2 block of lands, one is in Thornton, other one in Farley (a brand new area being developed near Rutherford).

    With the same type house and land, Thornton cost $80K more due to higher land value, but the expected profit/equity in both deals is ALMOST THE SAME. Naturally I will go for Farley as it costs less to achieve the same $profits.

    However, I have seen many new duplexes been built and sold in Thornton so I'm confident with future resale value in this area. But it's hard to find duplex homes sold in Farley or even in nearby suburbs like Rutherford/Telerah, so I am concerned whether duplexes in Farley will sell or not?

    If you were me, would you go for Thorton or Farley?
  2. Archaon

    Archaon Well-Known Member

    20th Mar, 2017
    Might want to check the Covenants and S88 etc to make sure duplexes can be built on the land you want to purchase.

    Personally, I've had success selling in Thornton, it's being over developed atm though, with very little I infrastructure upgrades, but there is demand.

    With the higher land value comes higher stamp duty and land tax etc.

    Farley has no access to public transport I'm fairly sure.
  3. datageek

    datageek Well-Known Member

    18th Apr, 2017
    Overall that Newcastle - Maitland significant urban area looks OK. The average DSR+ was 54 at the end of Jan. That's better than the Central Coast and Wollongong and on par with Sydney.

    But a large number of properties being built would trigger alarm bells for me. Sure, sales reflect demand. But new developments reflect supply. I'd prefer to see zero new development and still plenty of sales.

    I noticed the demand to supply ratio (DSR) for Thornton has dropped from around 70 to 55 over the last 12 months. Google satellite imagery shows a fair few development areas and plenty more available land that could be developed in the future. Wouldn't it be better to find an area with fewer developments and yet plenty of demand rather than an area with higher supply? I'm just thinking you'll be competing with other developers trying to find buyers for your completed project.

    Farley looks worse. The DSR has dropped steadily for the last 2 years from mid-60s down to 46. And the entire suburb looks like vacant land. Too much future infill risk for a long-term hold, but if you flip, it might not matter.

    Rutherford isn't nearly as bad and had a DSR for January of 66.

    What are your thoughts on Beresfield? It has less risk of infill and had a pretty high DSR of 72 for January. Is there development block potential there?
  4. Propertunity

    Propertunity Well-Known Member

    19th Jun, 2015
    No, I wouldn’t.
    wilso8948 likes this.
  5. wilso8948

    wilso8948 Well-Known Member

    23rd Jan, 2018
    What's your budget?