Oh and one more thing...
I've been looking at some construction estimates for villas and a basic 3x2 on a multi unit site seems to cost around $200k to build. Same thing rents around $300pw in the areas I'm looking at, within 1/2hr of a major CBD on public transport. Equates to a net yield around 5.5% if ur lucky. Pretty unattractive for the risk of DA and construction etc and with IRs getting up to 7%...
Of course this all assumes the land cost you nothing in the first place.
With dynamics like that you can't tell me rents are anywhere near properly valued. We're slowly working our way through the over supply of past years - slowly but surely nevertheless. One day we will get to the point where rents justify bringing on new supply but it's a long way off from here... particularly with Banks behaving as they are.
I've been looking at some construction estimates for villas and a basic 3x2 on a multi unit site seems to cost around $200k to build. Same thing rents around $300pw in the areas I'm looking at, within 1/2hr of a major CBD on public transport. Equates to a net yield around 5.5% if ur lucky. Pretty unattractive for the risk of DA and construction etc and with IRs getting up to 7%...
Of course this all assumes the land cost you nothing in the first place.
With dynamics like that you can't tell me rents are anywhere near properly valued. We're slowly working our way through the over supply of past years - slowly but surely nevertheless. One day we will get to the point where rents justify bringing on new supply but it's a long way off from here... particularly with Banks behaving as they are.