how important is LAND?
- Thread starter skuzy
- Start date
Yes, but my point is that if you have two identical houses in every single way, clones of each other.
Put them side by side, except one is on a bigger block of land, then the one on the bigger block of land will always be of higher value.
People will pay more for more land, not pay more for less land.
Put them side by side, except one is on a bigger block of land, then the one on the bigger block of land will always be of higher value.
People will pay more for more land, not pay more for less land.
I always buy land for capital growth because land appreciates and buildings depreciate
I always look for an older property sitting on as much land as I can afford.. ie. I would rather a 1960s house sitting on 1000sqm of land than a brand new house on 250sqs.
Buildings do go up in price however the increase is usually only made through inflation. Consistent capital growth is made from land value. Land is in limited supply and the more scarce that land is and the more limited its supply ie. water the more it will be sort after and will increase in price.
Statistically, without any boom, your city property will double ever 7-10 years however, water side property will treble every 7-10 years. This is because of the land value and tat you cant build water. Everyone loves water, whether it is lakes, ocean, even man made. Have you noticed most developers are including man made lakes in their development.
Always remember the higher the land content, the greater the capital growth.
Most property investor buy units, me personally I stay away from them. You own no land or a very small percentage.
I always look for an older property sitting on as much land as I can afford.. ie. I would rather a 1960s house sitting on 1000sqm of land than a brand new house on 250sqs.
Buildings do go up in price however the increase is usually only made through inflation. Consistent capital growth is made from land value. Land is in limited supply and the more scarce that land is and the more limited its supply ie. water the more it will be sort after and will increase in price.
Statistically, without any boom, your city property will double ever 7-10 years however, water side property will treble every 7-10 years. This is because of the land value and tat you cant build water. Everyone loves water, whether it is lakes, ocean, even man made. Have you noticed most developers are including man made lakes in their development.
Always remember the higher the land content, the greater the capital growth.
Most property investor buy units, me personally I stay away from them. You own no land or a very small percentage.
THis is the reason I want old houses on large blocks, so I can eventually develop and provide the market you have described above with the product they want. Buy the problem, sell the solution.
Sure if your intention is to divide the block as developers you look for a bigger block and be the person that makes the profit on doing that but from a renters and home purchasers point of view you are interested in the house you will be living in and a smaller block won't bother you if the house is up to scratch, you will pay the rent or pay the price.
The smaller block does not mean you will not experience good capital gains.
My townhouse in Mandurah is valued at $450,000 and sits on 259sqm, 2 years ago I paid $285,000 - sure I could have looked for an old house on a big block for a similar price - and if my intention was to develop I would have. Would I have exceeded my $165,000 increase in value? Yes if I had developed the block but if it was still an old house sitting on a big block I doubt it. Also remember that just because a block of land is big doesn't mean you can just go ahead and sub-divide it.
My current developments are on a new estate where the developer only allows a few duplexes to be built and sells the blocks on which this is allowable as duplex blocks with a relatively small premium built into the price. So far only 6 blocks have been designated as such and I have 3 of them. If anyone else has ideas about building a duplex they can have the privilege of paying an extra $170,000 for their block (I think that was the figure I read) which will obviously negate the profits.
There is some modern thinking going on and the times are definetly changing, people need to be a bit more flexible with their opinions or in the end they will be left behind. Not saying what is right or wrong just that there are many opinions and how things are is how things are.
The smaller block does not mean you will not experience good capital gains.
My townhouse in Mandurah is valued at $450,000 and sits on 259sqm, 2 years ago I paid $285,000 - sure I could have looked for an old house on a big block for a similar price - and if my intention was to develop I would have. Would I have exceeded my $165,000 increase in value? Yes if I had developed the block but if it was still an old house sitting on a big block I doubt it. Also remember that just because a block of land is big doesn't mean you can just go ahead and sub-divide it.
My current developments are on a new estate where the developer only allows a few duplexes to be built and sells the blocks on which this is allowable as duplex blocks with a relatively small premium built into the price. So far only 6 blocks have been designated as such and I have 3 of them. If anyone else has ideas about building a duplex they can have the privilege of paying an extra $170,000 for their block (I think that was the figure I read) which will obviously negate the profits.
There is some modern thinking going on and the times are definetly changing, people need to be a bit more flexible with their opinions or in the end they will be left behind. Not saying what is right or wrong just that there are many opinions and how things are is how things are.
Hi guys,
This is my first post! Great forum... been learning heaps!
I'm a novice property investor but have been doing some research. According to residex... houses with land value have significantly outperformed units in terms of capital growth over the last 10-12 years as well as the last 1, 3 and I think 5 year time frames both in the inner and outer city areas of melbourne.
But I think whether you buy more land or not depends on your goals and timeframes. And not all land is created equal!
You can download the report from residex for a cost of course!
Cheers
This is my first post! Great forum... been learning heaps!
I'm a novice property investor but have been doing some research. According to residex... houses with land value have significantly outperformed units in terms of capital growth over the last 10-12 years as well as the last 1, 3 and I think 5 year time frames both in the inner and outer city areas of melbourne.
But I think whether you buy more land or not depends on your goals and timeframes. And not all land is created equal!
You can download the report from residex for a cost of course!
Cheers
HI Dumpty
Welcome to the forum - love your name!
It seems to be a fairly recent thing, just going by my own experiences and things I have observed. I noticed it more in Perth initially last year but it is definetly spreading. Also some of the land prices on a new estate I know of in Queensland are a good size but the prices don't seem to make sense, for example there is only $12,000 difference between a 780sqm block and a 1200sqm block (only 3 blocks between the two) yet the land size is almost 400sqm different! Another block almost 100sqm larger is $2,000 cheaper. The builder is looking for similar prices for the completed packages so he doesn't seem too concerned about the variance in land sizes.
Welcome to the forum - love your name!
It seems to be a fairly recent thing, just going by my own experiences and things I have observed. I noticed it more in Perth initially last year but it is definetly spreading. Also some of the land prices on a new estate I know of in Queensland are a good size but the prices don't seem to make sense, for example there is only $12,000 difference between a 780sqm block and a 1200sqm block (only 3 blocks between the two) yet the land size is almost 400sqm different! Another block almost 100sqm larger is $2,000 cheaper. The builder is looking for similar prices for the completed packages so he doesn't seem too concerned about the variance in land sizes.
In 2003 price for block of land on man made lake in Princeton Estate (Stirling - Perth), about 8 km from CBD. 420 sq m. was $245 K. Price for biger blocks ( about 580 sq m) not on the lake - $200 K. It was very slow start, nobody wanted to buy. Today price for same blocks - on lake $700 k - $750k (not avalable), and about $560 K for same 580 sq m close to freeway, sold by developer (all sold).
For "cheap" blocks, about $250 K, 25 km or more from CBD few months ago people waited in cars, or tents for week to secure one of them.
Today, same story.
Regards - Doxa
For "cheap" blocks, about $250 K, 25 km or more from CBD few months ago people waited in cars, or tents for week to secure one of them.
Today, same story.
Regards - Doxa
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