My first ballot experience - Canberra

oracle

oracle

Hi all,

I thought I might share my first experience at a ballot that happened today in Canberra. There were 51 blocks of land being released ranging in 330 sq meters to 777 sq meters in size and $163K to $285K in price respectively.

Can anyone guess how many people registered and turned up for the ballot? 700 people. Yes I repeat 700 people turned up to buy 51 blocks. Goes to show how much demand there is.

Everyone was limited to buy a maximum of 1 block. Which is understandable. And had to pay 10% deposit right then and there.

They selected 51 entries + 50 reserves. My number came up in the reserves at 65. I didn't think there was any hope but still thought might hang around till the end. One of the reasons being the first person to be selected in the ballot who had all the choices to select any of the 51 blocks declined to purchase and walked out. It gave me some hope that I might just be lucky today. Although 14 people needed to pull out before I had any chance.

My aim was to buy a block ranging between 400-500 sq meters and put a 4 bedroom house on it and rent it out. But looking at what was happening I thought even if I get my hands onto anything I will just get it.

Finally, they called me in and there was only two blocks left and there was one person before me. Both blocks were the biggest and most expensive in the lot remaining. The other person select the little less expensive block and then only one block remained. The most expensive (285K) and the biggest (777 sq meters). I just decided to buy the block in the end.

Now I am in a bit of delimma. Since I bought a bigger block then I originally intended is there anything I can do to take advantage and maximise my investment returns? The settlement will happen in 6 months time. So I have plenty of time to research all my options.

Hope you have a great weekend and the party you voted for gets elected.

Cheers,
Oracle.
 
Congratulations Oracle!!

Since some of the blocks were as small as 330sqm, is there any chance of splitting your block into two?
Marg
 
Dual occupancy as Karina suggested would be a good idea. However I'll go out on a limb and guess that the size is due to it being an awkward shaped block which would'nt allow for this - my brother bought one of similar size when he built, and whilst the land is large, it's a trianglular shaped block with only a 9m frontage.

If this is the case - and your budget allows - perhaps you could build a larger house than you originally planned that would achieve a higher rental and perhaps yield?
 
Well done Oracle.

Where is the block?

I'll go with the suggestion just to build something a bit bigger. A dual occ solution may be doable, giving you potentially two streams of income, but you may have to be careful how it's done. A purpose built dual occ may not be able to be built on the block- but it may be possible to have something which is easily splittable.

Don't forget that you will be able to claim the stamp duty back if you build to lease it out.

(From the title of the thread, given today's other events, I thought this thread was going to be about voting for the first time).
 
Sorry for the confusion I should have named the title "My first Land Ballot experience".

I will certainly look into the option of dual occupancy. But the option of building something bigger also doesn't sound too bad. Especially since the block is awkward shaped (triangle).

Knowing that they are going to do another ballot in Feb'08. And more blocks to be released then today. I would like to see if I can participate in that ballot also.

The land ballot was for stage 2 of the new Franklin suburb. I think it's location is quite good. Only takes 10-15 min to reach the city during off peak hours. Close to gungahlin shopping centre and once the new gungahlin driveway is completed will be fairly easy to reach Belconnen, Tuggeranong and Woden areas as well.

Cheers,
Oracle
 
Oracle

Firstly,in general, in Canberra, dual occs are only allowed in what's called core areas - this generally means they are within 200m of local shops,etc.

Secondly I believe the blocks have to be at least 800 sq m to build a dual occ.

I think they might be allowed outside core areas but they are limited per block/section ie there can't be more than a certain percentage.

Even if you could build one, the dreaded betterment tax will kick in because you have changed the use of the block.

Gazza
 
Actually, after looking at the official website for that estate, it seems this is not the first release....i am actually wondering what happened to the 60 or so lots released first? Have they built houses on them or has anyone resold any??

I am just wondering what kind of CG it had for the past year...
 
mrfish said:
Actually, after looking at the official website for that estate, it seems this is not the first release....i am actually wondering what happened to the 60 or so lots released first? Have they built houses on them or has anyone resold any??

I am just wondering what kind of CG it had for the past year...
Click to expand...

I am not sure about the other blocks. But I know someone at work who bought in Stage1 (May'07) release. He bought a block around 350 sq meters for 143K. In stage2 (Nov'07) a slightly smaller size block 330 sq meters was being sold for 163K.

Regards,
Oracle
 
A lot of new estates have some pretty specific rules re dual occ's. You might find that they are not permitted.

If demand for the blocks was high it might be worth just putting it straight back on the market - obviously a lot of people missed out and you may even find that the secondary market might be quite healthy.

You could sell it to settle on the day you settle which might be a handy little windfall.

Or build a nice spec home and pop it back on the market.

Or build and hold.

Or do nothing but cut the grass. After the suburb is developing an empty block may be very attractive to people who want to build their dream home. As they see it surrounded by quality homes they will value it higher. This may even result in the 50% CGT discount. All interest will also be deductable against your CG.

Lots of options here and nice to know the land was in high demand. My only concern would be how much additional land is to be released as this may influence your selling potential.
 
Simon

I'm not sure if the "do nothing but cut grass" is an option in the ACT.

It used to be that building had to commence within 12 months of purchase when buying land in the ACT. That was the major reason why we bought in Queanbeyan, before we could afford to build. We bought a good block, which did not have to be built on within any time period.

Even back then, I had a hunch that it was the land which appreciated, so was happy to buy now and build several years later.
 
Melbear said:
You could always build house as you were going to, and then make a 'purpose built' granny flat out the back?
Click to expand...

You beat me to it! Canberra has very specific planning requirements, especially for new land releases. My in-laws recently paid 470k for a new block in Canberra, which has a requirement that 2 story properties are not allowed!

Build it with a nice granny flat, that includes it's own bathroom/laundry, and decent living spaces. Then you can find a tenant who is willing to pay a bit extra to give son/daughter/parents/friend a bit of space to themselves.
 
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