sparky23 said:
Hi Kenneth
Thank you for your response.
I am just wondering given that the difference in price of the blocks could be as much as $40,000 would it be as well to purchase the lower priced blocks as down the track would there really be as much as $40,000 difference in the value of the same 4 bed house on a more expensive block?
Also with the land values I live in NSW near the Shell Cove estate where 450m blocks range fron $250,000 to $300,000 so there could still be a fair amount of room for the land prices to grow - would $200,00 be realistic by December 2006 for this release of Anchorage blocks?
I am also wondering which builders offer the best value for money & can offer the shortest building times. I understand Metrostyle offer a 4 bed home completely finished at around $160,000 is that a good price or can we do better? Also would you recommend buying & holding land until December 2006 or would it be more profitable to build on it before seling?
Sparky
*****************************************************
Dear Sparky23,
1. In a certain way I can agree with your line of thinking as my second vacant land plot (496m2) which costs me only A$72,000 in April 2003, was given the same valuation land price at A$150,000 during its last bank valuation exercise conducted in Feb 2005 period, as my first vacant land plot, which was bigger in size (525 m2) and which costs me slightly more at A$75,500, way back in April 2003.
2. Having said this, there was however some variation in the initial land value/prices given by the valuers in Janaury 2004, of about A$5,000 difference between the smaller and bigger land lots, though the difference in their initial purchase price varies by only some A$3,500.
3. I do not think that we can effectively draw any valid conclusion by comparing the present land prices with that of your Shell Cove Estate in NSW. They are, in fact very different markets, at different stages and levels of development and with different market conditions prevailing presently.
4. Will the land prices in the Anchorage Estate reach A$200,000 in December 2006? I think it is likely to do so. From what I know, the present asking price for a standard size with non-lakefront view vacant land lot on resale in the Anchorage Estate is between A$175,000 -A$185,000 price range already, though the market value is about A$150,000-A$155,000 as shown in some bank valuation exercise. I also know that under the land and house package marketed by Australand under Stage 18, the small cottage land lots with lake front view has an in-built price of about A$185,000-A$210,000 price range, based on today's townhouse construction building costs estimates. Consequently, I think that Australand may further increase its land selling price under its last Stage 17 Land Release exercise further towards the end of this year by another A$10,000-A$15,000 per standard land lot, as a result of "scarcity" factor i.e as there is no more vacant land left available in its Anchorage Estate for sale in the near future.
5. As to the builder, provided you have negotiated well on the building contract with Metrostyle, I think its pricing and quality of work are highly competitive, as I am presently using them to build my third and fourth houses at the Anchorage Estate. My first house was built by Don Russell Homes Pty Ltd and my second house was built by Dale Alcock Homes Pty Ltd.
6. Work quality wise, all these 3 builders are good and highly reputable in the local Perth market;- between Don Russell Homes and Dale Alcock Homes builders, I have better value and returns for my monies, when building with Dale Alcock Homes Pty Ltd, all other things being equal, having built with these 2 builders myself in the past.
7. Between Dale Alcock Homes and Metrostyle Homes Builders, because I now have a private consultant to design my own houses first and then negotiate with Metrostyles builders for a better and cost-effective building contract for its house construction, I cannot say for sure if we were to compare on a "apple-to-apple" basis, though at the same time, I have no hesitation to continue using Metrostyle Builders again if it is so recommended to me by my private consultant.
8. Beside work quality and price-compeittiveness, we also take into considerations the existing workloads of the various builders and decide who is likely to give us the shortest building time to complete the house construction, cost-effectively to our own satisfaction and expectations.
9. You will need to work our your own figures and desired profit margins as well as tp consider the prevailing market conditions and risks involved and then decide for yourself whether you are going to on-sell the house under construction or to sell the house only upon its completion.
10. To me, it is simply a risk vis-a-vis-the level of profit margin that you want to make from your own investment, depending on your present circumstances, holding power and personality. Only you will know and can decide for yourself.
11. These are some of my own personal thoughts which I will like to share with you, for your own considerations,please.
12. Please do your own due diligence and research on the prevailing market conditions before making your onw investment decision.
13. Wishing you a "Happy and a Profitable" Investing Experience at the Anchorage Estate, should you choose to invest there in the immediate future.
14. Thank you.
regards,
Kenneth KOH
