Capital growth- land size threshold

[bez23]

Hi guys,

As the saying goes, land appreciates and building depreciates, however buying closer to CBD means less land for the same price. How do you make a decision on how much land is enough ? ie subdivision potential as threshold

Or do you just go for best yield in the best area whilst having a minimum requirement ? eg Rixter buying townhouse etc

This is assuming you are investing in an growth cycle area like Perth and money isn't the limiting factor.

Cheers,
bez

 

[Sequin]

Find the area you are interested in, and then do some basic research about the local council's planning scheme, eg what size lots can be subdivided for small lot housing, or what size lots will fit a duplex.

 

[asdf]

As the saying goes, land appreciates and building depreciates, however buying closer to CBD means less land for the same price.

Sticking to this mantra meant I missed out on considerable gains in the apartment sector in the inner city and eastern suburbs of Syd over the last 6 years. Don't believe that units don't go up. You can hold more of it and its the first to run when market starts heating up. Lesson learnt...

 

[Seanh]

There is also the basic rule in economics - supply and demand.

By comparing CBD apartments to suburban homes it doesn't seem to be apples to apples, as there are very few houses in CBD areas, even less are put up for sale.

I would compare CBD apartments to CBD houses, and suburban apartments to suburban houses. Then I believe the old saying stands true.

 

[Deltaberry]

It depends a lot of market dynamics and that specific property.

In some pockets, smaller things go up faster because they're easier to digest and attract more demand on a sale.

That said, in markets such as this, certain big sites actually see astronomical growth because of developer money coming in or offshore money.