Home prices compared to a year ago

Is really good to see such movements in the last 12 months and still seeing people getting in and finding good buying.
We still keep our eyes open for deceased estates, distressed sellers and and large blocks that can have multiple units - they are the honey pots that have worked best for us.
 
Hi Kent, at over 500k can you provide further insight into how the figures might work for such a site development wise?

Cheers!
Hi Perthnoob,

This client is looking at holding the site for 5 years before considering redevelopment, the reasoning behind the investment purchase was:
  • High land component value of 85%+ of the purchase price.
  • MW Research suggests the area to have growing future demand, combined with limited supply.
  • Low entry price point for comparable sized blocks of the same zoning

In a hypothetical scenario (based on the client holding and retaining dwelling with modifications), the numbers could look like the following:
End Values
Land $275k - $295k
Dwelling: $380k - $420k.
Total: $655k - $715k
Costs
Purchase Costs: $40k
Renovation Costs: $40k
Subdivision Costs: $35k
Land: $512k
Total: $627k
Equity generated: $28k - $88k

These numbers have been rounded for simplicity and I have removed holding costs, but there would be a 3 - 4 month window of vacancy if/when modifications are done to the existing dwelling. Note there are no allowances for selling/transaction cost. If the deal was to sell, I'd me more deal focused rather than location focused for capital growth.
 
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