H/L near Perth CBD - Growth prospects

[amit1987]

Hi All,

I am a first time investor and am considering to buy a land block within 10-12 kms from Perth CBD and build there like the property below.

http://www.realestate.com.au/property-residential+land-wa-bayswater-200933359

Questions:

a) Considering a decent size 3 by 2 or 4 by 2 house on it would cost around $225k, what are the capital growth prospects of such an investment?

b) Would I instead be better off buying an established (older style) property in the same area but around 580k-600k.

c) Do the rear block houses have limitation in terms of growth potential?

Thanks.
Amit

 

[INVSTOR]

I like it! I think you would find it would cost you at least $250,000 to build and landscape. Being a battle axe block you will find some builders won't touch it. You won't be able to build a standard house, you will have to go through development department and I've found it costs about 10% more so factor that in if it's not street front.

 

[MTR]

I really like it too.

I think land is so scarce in particular this close to CBD and it is sort after. Perhaps years ago there was more of a stigma in buying rear/strata block, I don't believe this is the case today. People want to live as close to CBD as possible with good infrastructure.

Will it limit growth? I doubt in this area, as long as the front is perhaps a nice well maintained home and not a dog you should do well.

 

[amit1987]

Thanks MTR and INVSTOR for your valuable suggestions. I indeed find these land blocks more attractive than similar ones 20+ kms away from the city but in the same price range.

Do you have any suggestions in the builder who I can approach to get price estimate for rear block construction?

Regards,
Amit

 

[MTR]

I would start off with some of the major spec builders, ie Ventura ID etc.
Also search on SS, there have been a number of recommendations made.

Cheers
MTR

 

[westminster]

I think as MTR has said the look of the front house is important for the growth of the rear house.

Also watch out for clay soils that close to the river.

Other than that I think infill blocks are the way to go for growth rather than far flung cottage blocks

 

[INVSTOR]

Thanks MTR and INVSTOR for your valuable suggestions. I indeed find these land blocks more attractive than similar ones 20+ kms away from the city but in the same price range.

Do you have any suggestions in the builder who I can approach to get price estimate for rear block construction?

Regards,
Amit

Any builder that has a development division. There is plenty! The only builder I discovered that wouldn't touch it was Celebrations.

 

[MTR]

Hi Invstor
That's interesting, I built 1 home using Celebrations, which at the time was a subsidiary of Dale Alcock, the cheaper version.

The quality was not as good, however the value was pretty amazing, and just needed to spec it up a little and worked well. Had no dramas, however I did build this at least 7 years ago.

MTR

 

[INVSTOR]

Hi Invstor
That's interesting, I built 1 home using Celebrations, which at the time was a subsidiary of Dale Alcock, the cheaper version.

The quality was not as good, however the value was pretty amazing, and just needed to spec it up a little and worked well. Had no dramas, however I did build this at least 7 years ago.

MTR

March last year I went and saw a display home at Brookleigh estate after hearing good things about Celebrations - I liked their pricing and designs. I was pretty disappointed! One of the things he mentioned was they didn't want to bother with insurance and any damage caused to existing house. I was pretty disappointed!
Then I went next door to Dale Alcock display home. He said he couldn't help me, I'd have to call their development section.
Celebrations were trying to talk me into a H&L package in a new section Of Brookleigh Estate, Caversham, with titles about to be released. They said they couldn't sell the blocks yet but I could choose a proposed block, I didn't have to put down a deposit for a couple of months as title didn't exist. I decided not to go through with it. I still think a battle axe block in Ashfield, Bassendean, Bayswater etc is better value for same size and price!