Property Cycle Clock - Where are we right now?

[Deltaberry]

Time will tell I guess. My hand is quite close to the pulse, the price differential with Syd is still too big, it just got started in May I'd argue. The 3% is as good as scrapped.

PS don't bother with SWHC publications. Have worked with them before...

More importantly foreign buyers can't buy houses anyway. Doesn't effect 99% of us here.

 

[hobo-jo]

Was the first random link I found when googling for the news (recalled reading about it in the MSM)... so you think they will reverse it before it comes into effect, despite it having been announced less than a month ago? Seems unlikely?

 

[Deltaberry]

I think so. Look I'm not sure what this graph monitors or how they compile data.

Between mid April and now late May, many pockets have spiked 10-15%. Obviously only in pockets I look at, outer East, Mid East, inner city, inner city, inner north, South east.

So the same house which would've sold 900k last month might sell 1.1m this weekend.

Now you and I know some macro graph will never jump like that but just telling you my observation. Markets within markets. I'm sure apartments haven't even grow .

 

[arashi87]

Funny I typed my post before seeing this. Completely agree.

And the nights just about to get wild in Melbourne. 10 months left peak in May 2016.

Property clock shows Melb is going 9oclock to 12oclock real quick, however, realistically, what infrastructures and government changes that will drive to its peaking?

 

[Deltaberry]

Yes it should have 2015 to run. And maybe a bit of 2016. The night has certainly started. Last drinks not far away.

 

[willair]

..

 

[Roosters]

Very late at night.

Its been a long night.........Feb 2014

 

[WattleIdo]

..

Johnny Cash?

 

[perthguy]

And the nights just about to get wild in Melbourne. 10 months left peak in May 2016.

I'm seriously considering selling my Melbourne development site but I want to get out of Melbourne while the market is still rising. I was thinking of making some enquiries in spring? I don't want to leave it too late.

 

[hobo-jo]

I reckon it would be worth getting out before the end of June if that surcharge is coming in from July 1st, especially if the site is marketable to foreign investors. It's only 3%, but may be enough to drive more foreign investment out of Melbourne into Sydney (or elsewhere).

 

[MTR]

I'm seriously considering selling my Melbourne development site but I want to get out of Melbourne while the market is still rising. I was thinking of making some enquiries in spring? I don't want to leave it too late.

If you purchased well ie early start of the cycle would you be better off developing the site?? Though, sometimes its nice to take the money and run in a hot market.

Have you checked out end values, your profit after tax etc?

Interesting times in Melb and Syd... hot, hot, hot, throw a dart, all areas seem to be doing very well

 

[sanj]

If you purchased well ie early start of the cycle would you be better off developing the site?? Though, sometimes its nice to take the money and run in a hot market.

Have you checked out end values, your profit after tax etc?

Interesting times in Melb and Syd... hot, hot, hot, throw a dart, all areas seem to be doing very well

As you have seen with some of your sites it's occasionally better to just flog off a site at the top of the market, take your 50% cgt discount and move on vs developing, making a small profit because the market is starting to turn, then selling and paying a hell of a lot of income tax and gst

 

[sash]

Yep going down there to snap up a couple properties this weekend.

If you purchased well ie early start of the cycle would you be better off developing the site?? Though, sometimes its nice to take the money and run in a hot market.

Have you checked out end values, your profit after tax etc?

Interesting times in Melb and Syd... hot, hot, hot, throw a dart, all areas seem to be doing very well

 

[MTR]

As you have seen with some of your sites it's occasionally better to just flog off a site at the top of the market, take your 50% cgt discount and move on vs developing, making a small profit because the market is starting to turn, then selling and paying a hell of a lot of income tax and gst

Yes, I agree, especially if you know the market has been running hot for a while, reduces the risk and just move on to another rising market using profits etc.

I had this option with Spearwood, and it was borderline for me, even my accountant made the comment "take the money and run". However I wanted to gain experience as this was my first build/development. It was the right choice for me as what I have learnt is invaluable, however not without some pain
Though if the project on completion was not cash flow positive I would have most definately sold the land and to hell with it.

MTR

 

[MTR]

Yep going down there to snap up a couple properties this weekend.

Happy hunting.

You will be fighting with every man and his dog trying to source the same. Its hell out there.

 

[sash]

Lets say I have pre-locked the deal..it is H&L...I have also bought a block of land in Geelong...based on what the developer has done in other estates...I should be 50k ahead by the time it is ready to build on. And the supply there is very low...so I would envisage a 100k profit on a 300k H&L package in about 18 months time...with a 5k deposit for 8 months followed by a 6 month construction period.

Happy hunting.

You will be fighting with every man and his dog trying to source the same. Its hell out there.

 

[oc1]

As you have seen with some of your sites it's occasionally better to just flog off a site at the top of the market, take your 50% cgt discount and move on vs developing, making a small profit because the market is starting to turn, then selling and paying a hell of a lot of income tax and gst

This is why developers must work out figures post tax ie after gst and income/company tax.

The other point is you can only make the best decision at the time. Easy to say I could have made more/about the same if I didn't develop. But what if the market DIDNT rise?

 

[perthguy]

If you purchased well ie early start of the cycle would you be better off developing the site?? Though, sometimes its nice to take the money and run in a hot market.

Have you checked out end values, your profit after tax etc?

Interesting times in Melb and Syd... hot, hot, hot, throw a dart, all areas seem to be doing very well

This place was purchased in 2007, so there is a decent profit margin. Purchase price was $385k. What makes a sale attractive is an old house in worse condition with the same block size sold around the corner recently for $625k. It's a shame I only own 50%

http://www.realestate.com.au/property-house-vic-heidelberg+heights-118935647

Potentially, I may make more from developing and selling down the track but it seems like less hassle to cash out without doing the work

It is a big decision for me to sell a development site without building because I have always wanted to build. That said, I am concerned about the logistics of building in Melbourne from Perth, particularly as it would only be my second build.

 

[perthguy]

I had this option with Spearwood, and it was borderline for me, even my accountant made the comment "take the money and run". However I wanted to gain experience as this was my first build/development. It was the right choice for me as what I have learnt is invaluable, however not without some pain

That's a good move. I am doing the same thing in Perth. I could make good money on the Perth property but I really want to hold this one long term and build to rent and hold. This is the one where I want to gain experience in building.

I don't have the same motivation for the Melbourne site, which is a reason why I'm leaning towards cashing out.

 

[sanj]

This is why developers must work out figures post tax ie after gst and income/company tax.

The other point is you can only make the best decision at the time. Easy to say I could have made more/about the same if I didn't develop. But what if the market DIDNT rise?

Yup, certainly no guarantees either way