Quality over Quantity

MarkB · 6th Jul, 2006

Record $16m Home Sale

10 June 2006

$16 million has been paid for a beach house at Byron Bay (above), easily doubling the record price for the region.

The property last sold for $2.09 million in 2000 (that's a 665%* increase in 6 years).

Quality over quantity....

M

*Not to mention the $13.91m profit pre-tax and costs

Source - Record $16m Home Sale

ram_vemula · 6th Jul, 2006

Pitt St said:
The property last sold for $2.09 million in 2000 (that's a 665% increase in 6 years).

Not bad Capital Growth I must say! I don't have that kind of capital...well not yet anyway

doreilly · 6th Jul, 2006

So did the original buyer underpay, the new buyer overpay or somewhere in between ?

MarkB · 6th Jul, 2006

doreilly said:
So did the original buyer underpay, the new buyer overpay or somewhere in between ?

Supply and demand (a property with few equivalents in an area popular with people who have very deep pockets).

The article goes onto say....

The previous record price paid for the region was $7.6 million for former Wallaby Peter Crittle’s Belongil beachfront home.

According to agents, the scarcity of similar properties had to be taken into account when considering the stratospheric $16 million price tag.

While there was a huge number of comparable waterfront properties in Sydney, there are only about a dozen in Byron Bay and they were owned by millionaires who were exceptionally reluctant to give up their properties.

It has been reported that Sydney buyer had engaged in a bidding war with another buyer from the Gold Coast which pushed up the price before the sale went through on June 1.

Kennethkohsg · 6th Jul, 2006

Dear All,

1. I think that in the prestige market segment, the games rules are very different with a very small but highly "exclusive" market players. Not all our properties will respond so profitably, as such, as the a/m property, over the same time period.

2. The real challenge for such kind of prestige property game is "Scarcity", "Exclusiveness" and "Holding Power" as well as how to target the very few but high-heeled buyers who are interested, willing and able to pay for the targetted record-breaking property prices.

3. It is not the usual cup of tea that many of us in this forum can well-afford to play nor willing to play even though some of us may be rich enough to play the game.

4. For your kind update, please.

5. Thank you.

regards,
Kenneth KOH

Barracuda · 6th Jul, 2006

Pitt St said:
It has been reported that Sydney buyer had engaged in a bidding war with another buyer from the Gold Coast which pushed up the price before the sale went through on June 1.

[/I]

I wonder how much the price would have been without the bidding war. No doubt ego's can get in the way in premium auctions too. Never gauranteed though.

wylie · 6th Jul, 2006

Kenneth mentiones high-heeled buyers. I hope he meant well heeled buyers, because the thought of the two buyers bidding the price up while wearing their high heels is a little weird (although perhaps they were both women).

The thought of rich men in fishnets and heels in a bidding war keeps popping into my head, but that's just me.

Wylie

Dazz · 6th Jul, 2006

wylie said:
The thought of rich men in fishnets and heels in a bidding war keeps popping into my head, but that's just me.

You mean like Alexander Downer in a Timor Leste negotiation ??

wylie · 6th Jul, 2006

Exactly my thoughts - I need a stiff drink!!

Wylie

quoll · 7th Jul, 2006

Agree on the quality vs quantity, even in the above average vs below average housing I will always try and buy the above average house.

It would be nice to have a few $1mil houses, even though the rent wouldn't be much you don't have to hold them for long to reap some nice capital gain.

Cheers
quoll

thefirstbruce · 7th Jul, 2006

Purchases like this aren't the pinnacle of investment, they are expressions of how big a person's d1*k is...

Byron ain't the place is used to be...

stretchy · 8th Jul, 2006

Quality over quantity....

But also a very high risk strategy Pitt St? You could buy one of those multi-millon dollar homes at the wrong and get just as badly burnt. Although the top-end hasnt been affected this time around, its typically that segment of the market that bears the brunt of deteriorating economic conditions. High reward usually implies high risk.

Jimmyjamjars · 8th Jul, 2006

thefirstbruce said:
Byron ain't the place is used to be...

Maybe not Bruce, but I was down there on the weekend & its still a very pretty place. Mrs. JJJ & I lived there on Wategos Beach in the mid 80's and we went down to show the kids where our Swami_J tangent originated

. We stayed there overnight and had a bit of a look around the next day. Even came home with a Kombi van, so there you go. Still has appeal for me.
JIM

thefirstbruce · 9th Jul, 2006

Jimmyjamjars said:
Maybe not Bruce, but I was down there on the weekend & its still a very pretty place. Mrs. JJJ & I lived there on Wategos Beach in the mid 80's and we went down to show the kids where our Swami_J tangent originated . We stayed there overnight and had a bit of a look around the next day. Even came home with a Kombi van, so there you go. Still has appeal for me.
JIM

Jimmy, the point is a 20 something wouldn't be able to live permanently at Wategos Beach today. The income earning potential in town doesn't match the rental potential.

MarkB · 24th Aug, 2006

More quality over quantity....

A property that sold for $5,200 in 1972 is now back on the market.

Offers over $6 million please.

Source - Sunday Mail, 13 August 2006

M

topcropper · 24th Aug, 2006

I make that a 23% return per year for 34 years.

Nice work.

See ya's.

Andrew_A · 24th Aug, 2006

topcropper said:
I make that a 23% return per year for 34 years.

Nice work.

See ya's.

Me too.

Shows the power of compounding at a decent clip, if the house had compounded at a more usual range of 10-11% then the present value would be around the 180k region, quite a marked difference.

Aceyducey · 24th Aug, 2006

thefirstbruce said:
Purchases like this aren't the pinnacle of investment, they are expressions of how big a person's d1*k is...

Maybe so, but you can afford a lot of plastic surgery with that type of return....

(or even a sex-change for the high-heeled buyers)

Cheers,

Aceyducey

thefirstbruce · 25th Aug, 2006

Andrew_A said:
Me too.

Shows the power of compounding at a decent clip, if the house had compounded at a more usual range of 10-11% then the present value would be around the 180k region, quite a marked difference.

Had to remember my algebra for powers for that one:

FV=PV(1+r)^n

r = ((FV/PV)^1/n) - 1

MarkB · 25th Aug, 2006

Seriously, who wants to have to remember formulas like that.

All you need to do is use the spreadsheet I posted here.

M

Quality over Quantity

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wylie

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