Advice on land purchase

[lazzaman]

We are very keen to buy one of a development of 9 X 15 -20 acre lots out of town that we know will be coming on the market in a couple of months after completion of Council processes.

Being completely naive about these things, we are wondering what the best approach is in order to get in before the advertising starts so as to hopefully secure the one of 4 of them that we want.

Not being sure of the market price of these as there have been very few of them made available in the area, is it best to ring the developer and ask what he wants for them or do we take a guess at what that might be.

Another subdivision on the same road, all 20 acres, has been selling for prices ranging from 600 - 860K with advertised asking price of 890K.
The ones we are interested in have better aspects than these but, for example, if we offered for a 15 acre lot, we are not sure how the smaller area trades off against the better position.

Any advice as to how to proceed would be appreciated.

Thanks

lazza

 

[Perp]

Is this for a PPoR?

 

[lazzaman]

Yes, ozperp, we want to live there. I think they are going to have 6 or 12months settlement during which time the developers have to comply with permits wrt water, roads etc, then we would begin building our PPoR there.
Our current one is umencumbered by mortgage if that is of relevance.

 

[Perp]

lazzaman, my experience with seeking acreage in the Pullenvale area (western Brisbane) is that size makes very little difference to the selling price, if the lots are unable to be further subdivided (which they usually can't). 1 acre and 20 acres often go for similar prices, or the 1 acre can be more expensive! The price seems to be primarily determined by whether you have views or not, how easy the lot is to build on (eg whether there's some flat land, how good road access is), how close you are to the shops (closer = more expensive), and whether the street is prestigious (eg if already full of multi-million dollar homes then it'll cost more).

I doubt whether the developer will be wanting to sell now before "testing the market", unless you're willing to pay top dollar and give him a high pre-sale figure that he can use to market the remaining properties, saying that the value's been set at $x (what you paid). I assume your intention is not to pay him top whack! I would imagine, if your aspect is better, the 15 vs 20 acre will be far less relevant and these new 15 acre lots may very well be more expensive, sorry.

How much better is your aspect? And do you mean solar orientation, or views? Is the infrastructure (ie roads sealed etc, mains sewerage) similar? How long ago were the sales down the road and is the market in that area hot right now? Was the market hotter or cooler when those sales were made?

 

[lazzaman]

Thank you, Ozperp, for going to the trouble of this helpful reply - very good of you.

All stands to reason too, just that we have fallen for the place a bit but are stretched to make it happen and are clutching at straws I suppose looking for an advantage.

The other blocks are still selling, slowly, and the same agent is going to handle these when they come on the market. So we will express our interest through him and give the developer a miss.

Thanks again

lazza

 

[Perp]

I'm feeling your pain - we very nearly bought a $550K lot a few weeks ago, after years of looking for just the right lot. But then we really thought about it, realised that the kind of house I want to build will cost $2,500 per m2 to build, which for a 300m2 house (and we currently have around 400m2 so doubt we'd want to go below that), means $750K for a house, and thus $1.3M total investment... almost double what our current PPR is worth.

We ummed and aahed over it a couple of weeks, then decided that as we're just getting over the cashflow crisis of our 2007 development, we could live without the drama for 2008...

Hope your story has a better ending, ie that somehow you can afford your dream lot, AND the home to go on it.

Though out of curiosity, as we have more equity and cashflow than a good portion of the population, I do wonder WHO ARE all these people who live in $1M+ homes, which are now becoming quite common? Are they people who really can't afford to live in them? I know a lot of them bought years ago for much less, but there still seem to be a lot of "young people" (now I sound old!) who buy into them... how on earth do they do it? Sorry, I digress...

 

[johnbeckestate]

find something level to save yourself a lot of money and trouble.
Good luck, sounds like fun!

 

[Dazz]

Though out of curiosity, as we have more equity and cashflow than a good portion of the population, I do wonder WHO ARE all these people who live in $1M+ homes, which are now becoming quite common? Are they people who really can't afford to live in them? I know a lot of them bought years ago for much less, but there still seem to be a lot of "young people" (now I sound old!) who buy into them... how on earth do they do it? Sorry, I digress...

Hey ya Tracey,

I think you'd be surprised at just how many people out there - the vast majority obviously who do not contribute to this forum, who have bucketloads of equity and cash available to them.

I'm always staggered at the amount of money on display.....and all of the quiet buggers sitting in the corner who say nothing, and contribute nothing, but have absolutely oodles of moolah.

I guess 1M bucks isn't quite that significant anymore.


P.S. Thanks for organising the fabbo dinner at the Regatta Hotel in Brisbane. It was great to finally put a face to some of the nicks on the forum. By chance I bought the April edition of the API mag and saw you and your husband re: the development you achieved. Congrats. I thought your write up here on this forum was far more thorough that what the journo did in the mag.

Cheers mate.

 

[Perp]

I think you'd be surprised at just how many people out there - the vast majority obviously who do not contribute to this forum, who have bucketloads of equity and cash available to them.

Obviously there are lots of very wealthy people out there, but the sheer numbers still surprise me. Looking at ABS statistics, I know that from an income perspective we're in the top, say, 3% (not the actual figure) of household incomes in the country. But there seem to be a lot more than 3% of people who live in significantly more expensive houses than us! Now I know that people who are living off equity and many in business won't appear in that 3% because their taxable income is nil/negligible, but I don't think this can account for all of it...

P.S. Thanks for organising the fabbo dinner at the Regatta Hotel in Brisbane. It was great to finally put a face to some of the nicks on the forum.

You're welcome re the dinner - I thoroughly enjoyed myself, too. Hope you're enjoying the rest of your vacation. You must be getting on the cruise ship any day now... ahhhh....

By chance I bought the April edition of the API mag and saw you and your husband re: the development you achieved. Congrats. I thought your write up here on this forum was far more thorough that what the journo did in the mag.

Thanks, Dazzling. In fairness, poor Matthew Liddy (the journalist) got given the whole sad sorry story, but they're limited with space. He put some more - particularly the happy ending - on their website when he ran out of space. I managed to track down a copy of your star turn in API a few years ago... if I ever appear in API again, I hope it's less of a dubious honour than being in "My Property Nightmare"!!!!