Investing in the Anchorage Estate at Rockingham-Shoalwaters Suburb

[Kennethkohsg]

Dear All,

1. I write to update you that I am proceeding to construct a 2-storey house at Lot 2012 with a quoted building cost of $315,916 by the Perceptions Builders Group.

2. According to my associates in Perth, the building costs for the same 2-storey house (with 359.02 total building area) was recently quoted to be more than A$365,000 by In-Vogue Builders Group whom I used to build with, for all my single-storey residential houses, in the past 2 years.

3. What do people think or say regarding the wide building costs variations for this 359.02 m2 total building area-wide double-storey house, please.

4. Looking forward to be further self-educated and learning from each one of you, please.

5. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Dear All,

1. It was reported that more than 300 people gathered for the first release of the Rockingham Waterfront Urban Village last Saturday morning for the public auction of 17 blocks of vacant lands there.

2. All the lands were reported sold out in less than an hour.

3. Prices achieved for these small vacant land blocks ranged from A$268,000 to A$319,000 for a block closest to the ocean.

4. Landcorp CEO Mario Cluadio was quoted as saying that the achieved prices has showed that Rockingham has fast becoming a sought-after modern coastal city. When completed, the Rockingham Urban Village will provide a range of tourism, lifestyle, commerical and retials opportunties and will be home to more than 400 people.

http://www.news.com.au/perthnow/story/0,21598,19953096-2761,00.html

5. I was further informed that some of the vacant land blocks sold at the Rockingham Urban Village was as small as 300m2 or lesser., thereby suggesting that there is still much growth potential in the the Anchorage Estate.

6. What do the other members think and say, please.

7. Thank you.

regards,
Kenneth KOH

 

[kph]

Ken,
Me no understand...

Not long ago you were expressing caution about an impending global meltdown along with the advise that it would be good to cash up and sell properties in the current Perth market, and now with the problems in the middle east which could conceivably lead to global problems, you are building again for $316k in Perth ??

Why the change of heart ??

BTW what do you expect the market value of this property to be once completed ( eg.... $700k...or ?)

kp

 

[Kennethkohsg]

Ken,
Me no understand...

Not long ago you were expressing caution about an impending global meltdown along with the advise that it would be good to cash up and sell properties in the current Perth market, and now with the problems in the middle east which could conceivably lead to global problems, you are building again for $316k in Perth ??

Why the change of heart ??

BTW what do you expect the market value of this property to be once completed ( eg.... $700k...or ?)

kp

***********************************
Dear KPH,

1. If not for your foreign investments laws, requiring my Australian Company to commence continuous house construction upon its acquisition of the vacant land in Australia, I would have sold off the land for a profit instead so as to minimise my own investing risk.

2. As for building a double-storey house, I have been advised that by building the double-storey house when I can afford it, I will be able to achieve the best use and value for the land, with at least an additional A$50,000 price premium for its water views over the natural Lake Richmond, beside having the direct man-made lake-front views, together with the Australand's lakefront quality townhouses.

3. Am I still operating under the assumption of a global financial crisis occuring in the near future?, Yes, I'm still are presently except that with more cashflow available and cash contingency buffers funds available, I should be able to better manage my much reduced/smaller property portfolio.

4. This 2-storey house construction, is deemed to be more or less, as a medium-long term investment option. Even if the financial crisis should occurs, I think that I should have sufficient cash fund to sufficiently buffer its adverse effects.

5. As for the likely house value for this 2-storey house upon its completion, I can see it easily reaching upto A$650,000-$700,000 price range, other things being equal and based on current market trends.

6. Alternatively, should a global financial crisis were to occur in the immediate near future and provided that it is not prolonged one, I still expect the house to reach this price range at its next property cycle too.

7. For your kind update, please

8. Thank you.


regards,
Kenneth KOH

 

[kph]

Thanks for clarifying Ken,
Makes sense now.
I forgot about FIRB requiring you to build on vacant land, but I thought you could hold the land for longer before having to build ?
I have dealt with overseas buyers in the past and as I remember, they subdivided residential land and sold off some of the smaller lots without building.
Maybe the rules have changed..

Anyway, I am sure you will do well with this property.

kp

 

[stockt12]

Based on this thread I am now interested in obtaining the house and land packages available in this area. Can someone please provide more information into the continuation of this area and possible negatives to this investment.

I really enjoy the posts from you Kenneth, it makes everything seem as if noone can do any wrong - Making me more comfortable with my step into property investing. But unfortunately in this game, the wise thing is not necessarily the right thing.

 

[Kennethkohsg]

But unfortunately in this game, the wise thing is not necessarily the right thing.

***************************
Dear Stock12,

1. What do you mean? Care to clarify further your own doubts and underlying thinking, for us, please?

2. I look forward to hearing and learning from you please.

3. Thank you.

Cheers,
Kenneth KOH

 

[stockt12]

Kenneth,

I was more looking forward to your feedback, kphs feedback and generally the other knowledgeable investors on these boards. I am new to this game and I tend to sometimes use other methods [from the different fields/interests I have] to provide myself with enough ticks to take the plunge with property. In this case I look at the current RBA move, in turn the governments reply to the move, the % of investor dollar that 'may' be moved elsewhere [more specifically the high % of overseas dollars currently flooding the perth market] in the coming 12 months et all. For you, it is a 10-15 year investment, for me I was hoping to see the rewards of the investment dollar within 3-5 years and there is where my doubts lay.

For the time being.. I will just be an onlooker on these boards, trying to get a fundamental understanding of everything involved and in time with hopefully develop my own ideals in regards to PI.

 

[D.T.]

Hi,

If you're a new investor, I'd probably keep well away from Perth market at this stage. Even the pro's are unsure of it's remaining duration. A bit of research into Melbourne or Brisbane could be well worth your while.

Theres not alot of money to be made at the peak.

 

[Kennethkohsg]

Investing in the Anchorage Estate at Rockingham-Shoalwaters Suburb

Kenneth,

For you, it is a 10-15 year investment, for me I was hoping to see the rewards of the investment dollar within 3-5 years and there is where my doubts lay.

***************************************************
Dear Stock12,

1. When I look at my own investment records in the Anchorage Estate, my actual property holding period is only about 1-4 years duration on the average, from April 2003 to 2006 period.

2. I have purchased/settled on the vacant land at Lot 1664, 15 FitzGibbon Road, on 13th July 2004 and sold off the property on 13 October 2005. Likewise, I have purchased the land at Lot 1667, 21 FitzGibbon Road on the same day and sold off the property on 3rd July 2006.

3. So your a/m statement regarding my property investing time frame, is not quite accurate nor correct.

4. If your time frame is so short, I presume that you are quite sharp and decisive in your market entry and exit as a market speculator or/and a property trader.

5. I know that there has been quite a few cases in the Anchorage Estate where the buyer simply bought the property and then re-sell them profitably in the same market only 1-2 years subsequently.

6. Such is the case for the present house owners at 48 Liechardt Loop, who is known to have last purchased the house for $365,000 last year and now trying to re-sell it for A$489,000.

7. If you are indeed such a person and using such kind of short term property trading technique, we can always arrange to meet up in person to further discuss on the various opportunities available, after I return to Perth on 15th August 2006. My Australian mobile is 0418758123.

8. For your kind update and considerations, please.

9. Thank you.

regards,
Kenneth KOH

 

[<KS>]

I agree Dave.

You actually can make money at the top - its just a lot harder and carries a LOT more inherent risk.

Especially with rates increasing etc.

<KS>

 

[Kennethkohsg]

Dear All,

1. I was talking/sharing with some the potential investors in Singapore about the Perth property market, when I "suddenly" realise that from my own investments in the Anchorage Estate that the land price is actually growing around 100%P.A!... from $72,000 per vacant land block to $235,000 in 2006 and still increasing further.

2. Though I was very happy with myself over the investments, unfortunately, I do not think that such phenomenal growth can be sustainable over a longer period. This is despite the current market shortfall of land availability within WA, in the immediate short term basis.

3. What do the members think and say?

4. Thank you

regards,
Kenneth KOH

 

[stockt12]

Kenneth,

In regards to your previous reply :

If I choose to get in on the Anchorage estate it would ONLY be for the short term growth of the area. I would not be able to get anywhere near the returns you have managed to acheive, but a reasonable gain can be expected.


to your current post :

Of course the returns at that previous % cannot be sustained, but with the amount of international investors involving themselves in the perth area, the amount of people 'joining' the craze and the lack of quality land.. it will continue to grow until at least the next interest rate rise[6-9 months assuming].

 

[Kennethkohsg]

Kenneth,

If I choose to get in on the Anchorage estate it would ONLY be for the short term growth of the area.

I would not be able to get anywhere near the returns you have managed to acheive, but a reasonable gain can be expected.

*************************************
Dear Stock12,

1. Your a/m point 1 is hereby noted.

2. What kind of "gains" are you expecting and what kind of gains would be deemed "reasonsable" for you.

3. Care to further clarify your own expectations first before I comment, please.

4. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Kenneth,

Of course the returns at that previous % cannot be sustained, but with the amount of international investors involving themselves in the perth area, the amount of people 'joining' the craze and the lack of quality land.. it will continue to grow until at least the next interest rate rise[6-9 months assuming].

****************************************************
Dear Stockt12,

1. While I do agree with most of your a/m views, I am also open to the possibility that the next interest rate may be as early as September 2006 (worst scenario) or in November 2006 ( more likely) if the current inflationary spiral fails to fall down fast enough to be below the RBA's 3% limit trend targetted.

2. It has been further said that the Perth property market has already snuffed out the impact of the 0.25% interest rate increase introduced in August 2006 and that the Perth 's median housing price is likely to continue to rise further in 2006, which you has similarly suggested, it won't be long that RBA may soon be forced to act again, in order to slow down the Perth median housing price growth, even though it is likely to risk triggering off a recession in the NSW State Economy.

3. For your kind update, please.

4. Thank you.

regards,
Kenneth KOH

 

[Ausprop]

I don't think the RBA cares about Perth median prices, it is more concerned about general inflation.

 

[stockt12]

So very true Aus. Apparently even the price of bananas is more important to our economy than Perths housing market

Kenneth, to keep the reply short.. 20% within 3 years. But current projections anticipate the area will grow around 30-35% would be a mammoth bonus. This is coming from people with a much greater knowledge than I currently possess so who I am to dispute this?

 

[TheAnalyst]

I probably disagree with you either point.

The first -- it maybe another one end of this year, but will not be September.

The second -- Perth is only VERY small property market in the Australia context -- I guess 15%. The RBA will not act on to ONLY cool the Perth market while it puts salt on the wounds of Sydney, Melbourne, Brisbane etc. It will not have common sense in acting that way.

The medium price quoted around is flawed, can be put up for arguement. RE industry in WA is a crap full of greedy, ugly sales persons ( I do not know other states). They want to sell your property in 2 weeks and get $10 000 > commission.

****************************************************
Dear Stockt12,

1. While I do agree with most of your a/m views, I am also open to the possibility that the next interest rate may be as early as September 2006 (worst scenario) or in November 2006 ( more likely) if the current inflationary spiral fails to fall down fast enough to be below the RBA's 3% limit trend targetted.

2. It has been further said that the Perth property market has already snuffed out the impact of the 0.25% interest rate increase introduced in August 2006 and that the Perth 's median housing price is likely to continue to rise further in 2006, which you has similarly suggested, it won't be long that RBA may soon be forced to act again, in order to slow down the Perth median housing price growth, even though it is likely to risk triggering off a recession in the NSW State Economy.

3. For your kind update, please.

4. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Kenneth, to keep the reply short.. 20% within 3 years.

But current projections anticipate the area will grow around 30-35% would be a mammoth bonus.

This is coming from people with a much greater knowledge than I currently possess so who I am to dispute this?

*************************************************
Dear Stockt12,

1. Personally, I think that your expectations of 20% within 3 years is very realistic and achieveable in the Anchorage Estate, provided all things remain equal as before.

2. Perhaps, you should ask those people whom you are presently comfortable with or/and personally know them as being highly knowledgeable, to advise you accordingly on how to seek out these relevant investment opportunities for yourself.

3. For your kind update, please.

4. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

I probably disagree with you either point.

The second -- Perth is only VERY small property market in the Australia context -- I guess 15%. The RBA will not act on to ONLY cool the Perth market while it puts salt on the wounds of Sydney, Melbourne, Brisbane etc. It will not have common sense in acting that way.

***********************************
Dear TheAnaylst,

1. Putting aside our personal opinions and other theories, isn't this the very effects being inflicted on the Eastern State property markets now, given this latest round of the interest rate increase in the September 2006?

2. Perhaps, you may want to read the following report for yourself:
http://www.news.com.au/business/story/0,23636,20039184-462,00.html.

3. For your kind update, please.

4. Thank you.

regards,
Kenneth KOH