Sunshine Coast....development economics

[bradje]

Hi,
I was told that many of the medium developers have moved out of the Sunshine Coast to Brisbane and the big guys have scaled back considerably. Given also that in the building industry up there, the un-employment rate is >15% in the area.......

What do u think about the timing/economics for kicking off a small duplex development up there now? It will be 12-18 months to finish the deal from buying to end.....then on to selling the properties.

So is the depression of the market actually a good time to start a small development that will take 12-18 months, or is it wiser/safer to wait until signs are there that un-employment is dropping.....
Thx,
JB

 

[random]

15% , wow that's high isn't it.

Don't know but do have some details .We lived up at Noosa for a few yrs , left 01 or so , right when the boom was taking off.
Before that things were slow up there . I could have gotten so many deals , you wouldn't believe what was offered to me .
It was all too easy to get caught out in qld property a round then though and before , especially if you were going back sth as we were and didn't want to risk being in an interstate bind with trip back costs all the time b/c it won't rent worries .
Well , it took off of course , bad decision and loss on my part but, no doubt since knowing the way only qld can build , develop, build develop, like no other , I'd be wary now .
I know for a fact I wouldn't recognize our street , suburb or the whole sunny coast for that matter from only 8-9 yrs ago , so it's just been on one hell of a run .
There's triple on the market there now, add another 18mths to that, in unfinished projects plus an uncertain economy and poss' bubble, dunno , risky.
Spose if your sure you could rent it out and hold if have to regardless , no risk but no one can property flood like qld , so research strongly first is my vote .

jmo

Cheers

 

[bradje]

thx jmo,
I think the 15% is correct...for the building game up there. They have even had some demos outside council, if I remember correctly, about 2-3 months ago.

Yes, it seems rather early in the cycle doesn't it? Might be better to wait a while and see the signs happening in Brisbane first..
cheers,
JB

 

[random]

Yeah well , that is just my opinion but I did just take a look at Coolum to satisfy my own curiosity & as I thought . 12 mths ago there was around 220 properties on a Coolum search , now there's 411 .
If the economy slows like a lot are expecting and add another 12 mths to the equation , that'll be 5-600 by then b/c stuff started in the last 12 mths will be just hitting the market. Personally I reckon they'll be back to having trouble giving them away just like the 90's .

Cheers

 

[WinstonWolfe]

The residential construction industry is the largest employer on the Sunshine Coast.

Think about the consequences of that.

 

[Fudge]

You still have the big guys up here.

There are two huge developments happening at the moment (Sunshine Cove and Brightwater)....and that is just around Maroochydore. There is also plans for even bigger stuff happening south of Caloundra, and not to mention Palmwoods (or is it Palmview??)

Anyway, I wouldn't base my decision on unemployment and what the big guys are doing.

Also, for a duplex development (small scale development), provided you do your DD and take all costs into account, if it works out well, then go do it.

Just make sure you take into account all costs (including holding costs)....... and what you can actually get for your duplex when you finish up in a year.
F