The eastern and SE suburbs are blue chip but there are definitely niche pockets that are attracting international buyers and in some cases, crazy prices. Of course the demand (and ability to pay these prices) could disappear if the economy in China, India, etc slows considerably.
The same property was sold in Sept 2012 for $450k.
Conservative cost estimates:
Purchase price $450k
Stamp Duty $ 22k
Plans & Permits $ 40k
Holding costs $ 60k
Build costs $285k
Selling costs $ 30k
____________________
Total cost $887k
Capital gain $533k or 60%
This is a great return in only about 18 months, even once they pay their CGT.
Then onto the next development...
No way in 2 years the price of land there wasn't that cheap, are you sure? that's gotta be wrong.
you cant get a 600m2 block in forest hill for less than 650-700K now and your dreaming of 285K for a 48sq Waldorf by porter davis
reckon prices to do it now would be.....
a 650sqm land @ forest hill will be around say 675k
plus stamp duty 35K ,
+ 30k demolition, underground pit, and council permits,
plus 450K building, the basic PD Waldorf is 335K currently
+ 40k driveway and landscaping,
50K interest/holding cost ,
25K selling (agent) cost ,
the total cost will be over 1,300K.
If only sell for 1,420K, seems the return is just so so .... (1420/1300-1 = 9%)
+ also the headache and time to oversee the whole construction...
unless the land was significantly cheaper i can see the figures being that good.