Apologies all for the delay in responding to the various posts. To answer KPH's initial query with regards to timing. I signed off off the plan in Sept 06. It took until the end of December for the land to be settled. Building commenced at the start of the year and is complete and handover by end June07. 730sq.m greentitle block in Millers Well.
As an investment strategy I also do like this approach as stamp duty (killer in greedy W>A) is less and although you are paying interest on your land loan and BICOE loan the property is already yours from day 1 and appreciates by the time the house is complete. This one at Karratha I bought off the plan for $598,000 with $1,000 deposit (all borrowed of course), SD was $6580 and total interest bill for all loans during construction phase =$20K. The agent valued it around $780-800,000. But at a yield of around 13% that cahs flow is going to fund the next in Perth this time. As Chris notes, land is very difficult to come by at Karratha. The govt hasn't kept up with issue of suitable land and thus put a squeeze on what's in the market. Commercial land too, I understand is even harder to come by. Even a gravel, fenced yard at KIE would be a great investment. These business needs somewhere to lay down a load or park their trucks.
The resource boom driven Karratha is driven by too many commodities. I honestly can't see it going bust for the next 20 years. Prices may flatten if the govt lifts their game but, when have you ever seen that happen either?
Cheers,
Roem
As an investment strategy I also do like this approach as stamp duty (killer in greedy W>A) is less and although you are paying interest on your land loan and BICOE loan the property is already yours from day 1 and appreciates by the time the house is complete. This one at Karratha I bought off the plan for $598,000 with $1,000 deposit (all borrowed of course), SD was $6580 and total interest bill for all loans during construction phase =$20K. The agent valued it around $780-800,000. But at a yield of around 13% that cahs flow is going to fund the next in Perth this time. As Chris notes, land is very difficult to come by at Karratha. The govt hasn't kept up with issue of suitable land and thus put a squeeze on what's in the market. Commercial land too, I understand is even harder to come by. Even a gravel, fenced yard at KIE would be a great investment. These business needs somewhere to lay down a load or park their trucks.
The resource boom driven Karratha is driven by too many commodities. I honestly can't see it going bust for the next 20 years. Prices may flatten if the govt lifts their game but, when have you ever seen that happen either?
Cheers,
Roem
