Well that's the Richest group of Asian buyers I've ever seen!!
How then do the well heeled dress!!
But I think you may be looking at it (This sale) from a one-sided view.
If Its a corner block of 1000 meters you could get 4 or 5 apartments on it.
At a building cost of say $350/$450K each
it wouldn't be unreasonable to expect $1.1 or so for each to sell for.
There is a drink in that to the tune of around $500K
If you understand that stupid prices AREN'T paid by stupid people---
The ridiculous will look totally different.
Many years ago I passed in a Corner block at $850K and it was sold for $965K
My remark to others was someone didn't do their home work As Id come up with 4 blocks
Turns out it was ME!!
They subdivided it into 5 and made a killing!
The article was about $1 million over reserve, not 115k.
Magoo
You didn't get to year 11 did you?
Say 5 apartments --land cost $2.38 million/5 = $476K
Development costs say $450K each
Total cost to B/E $926K each
So if they got $1.1 million each thats $170K profit each.
OR
If they sold for $990,000 each thats $64000 each still $320K.
My reply was HOW and WHY ---well possibly.
It seems that residential rental yields have fallen to the point that residential property prices should stabilize, or maybe plus/minus 5% in the capital city markets for 2015. I've read that commercial property price growth has lagged behind residential. Would this be a good time to look at commercial property? Or with a slowdown coming, it might be a bit early? I'm really interested to hear what others are thinking about future property prices.
Not sure how that is relevant ? Is the profit the price over reserve for which the property sold or am I missing something ? Because it seems like you're talking about a profit making venture not sale over reserve price.
Magoo---seriously???
The OP was as was the Agent blown away by the price over reserve. (Yes the seller pocketed a packet.)
There is a thread of argument that these greedy Chinese are coming in and paying stupid
prices that us mere mortals cant even entertain.
I'm showing you and others why the figure is just a business deal and pointing out that the people in the crowd were no different to 95% of blue collar Australia---other than their obvious race.
I guarantee that next door---not on a corner block would only sell ate standard retail pricing.
There is NO MYSTERY.
Other than the Dumb agent---
Magoo
Let me not only introduce you to reality but also educate you.
Years ago Greeks/Italians/Yugoslavs did as the Chinese and Indian Cultures do today (Some of them).
They form together as Co-ops. There maybe 10 or more of them in one (Co Op) like the one you see presented as "Remarkable"
This explains why there are so many people at the auction---all wanting to be able to see how their group go.
They start with the eldest in the group and free hold a home for them first and finish with the youngest.
As a group they can achieve that which an individual cannot.
Not only that-----they need only employ a licensed Project manager and they can build themselves without a great deal of labor cost---more profit for the Co op!!
Ill guarantee you most of the constituents in the Co Op wont be earning as much as you.
This is the way of life now.
We --developers who started Naked and penniless just like you---have to compete with these guys!
My first home was $37K and my wage $8k a year.----and interest rates 10% that went to 18%
Don't give me the woe is me rubbish---get smart---even a dumb ass with no year 11 made it!
Stop trolling. Prices were at 3 times income, they're now 8 to 10 times income. What do you want ? 30 times income in another 30 years ? Great social development.
To think that $2 million for a basic home is justifiable just shows how long you have been out of the real world and how little attachment (if any) you have to people who work for a living and don't speculate on real estate.
I take home what ? 60k a year ? So to me even a 280k mortgage is a hell of a lot of money. Your $2 million business deal for a normal family home defies belief.
The fact you expect others to pay 900k for a small unit so you can make 320k for doing nothing also defies belief. Where is your understand of the value of money ? Do you have any idea how long it would take to earn 900k ?
Would you even have that much money if it weren't for the property boom
Sorry ---- perhaps some other members will find benefit from the posts.
Your handle of Magoo is brilliant!
I was thinking about commercial property a couple of months ago: development of professional suites adjacent recently completed private hospital. Details offered included 8% yield plus potential for capital gain.It seems that residential rental yields have fallen to the point that residential property prices should stabilize, or maybe plus/minus 5% in the capital city markets for 2015. I've read that commercial property price growth has lagged behind residential. Would this be a good time to look at commercial property? Or with a slowdown coming, it might be a bit early? I'm really interested to hear what others are thinking about future property prices.
Where's your land cost?
The land cost is the 1.24 million. This is a reverse valuation to see what you would pay for a block of land to develop. It is in an EXCEL spreadsheet but it did not translate all the cells / data across when I uploaded it here.
It is justifiable for a developer, because he is not paying that price for the basic family home, He is paying that price for the development potential.
Just because its a normal family home today, doesn't mean it will always be. and just because you couldn't personally fund such an investment in your present state, doesn't mean it's wrong or immoral that others can.
I mean right now there is a large shopping centre development going near my home, it will probably run into the 100's of millions, does the fact that I couldn't afford to do a development that large mean it's immoral that another group can? offcourse the development group could out bid the average punter for the land, because the average punter doesn't have the skill set required to fund and complete a large shopping centre, but again that's not wrong, its just how it is.
If you want part of it you can invest some of your $60K salary in a development company.
Again, just because you don't want to buy something, or can't afford it, doesn't mean others can not.
If the developer over pays for that land, so what? it's their money at risk.
that's the same with everything, the vast majority of rich people, are rich because they made prior investments.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?