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Bling_Bling
15-12-2004, 07:32 AM
Anyone know the prices for residential land only in most major cities around NZ, or even the average price for NZ.

I am thinking of purchasing a piece of land around 1,000 sqm in Auckland .

Do you think bare land is a good investment?

Halebop
15-12-2004, 09:37 AM
Bare land historically has been a quite good investment but usually presents lousy cashflow charactersitics.

My father would hardly call himself a land speculator but he has the patience to wait and buy land during "cash-is-king" recessionary phases or at mortgagee sale and then flogging it off during the good times. He has good personal cashflows, no need for debt and a stoic propensity for inactivity. All the characterisitcs required for bare land investment. Being a lawyer is a minor cost saving benefit as well.

He recently sold the crown Jewel of his land holdings (probably a good indication of where he thinks we are in the cycle) - a bare seaside section in a well known Coromandal area he bought for $35,000 in 1986. I'm not sure of the price but I can imagine!

Capitalist
15-12-2004, 02:55 PM
Bare land is a great investment if you don't need the cashflow. Bought section in Tairua for $40k 10 years ago sold for $250k last year.

Bought section in Russell for $250k 18 months ago and that has more than doubled in value.

Get good advice about where to buy and you cannot go wrong.

Bling_Bling
15-12-2004, 04:12 PM
Where do you guys think the cycle is now for land prices?

The property market seems to be still healthy and bare land is getting more scarce, especially ones that are close to the city.

Do you know the national average for land prices?

duncan macgregor
16-12-2004, 07:02 AM
BLING BLING, They dont make it anymore it will keep going up faster than what you build on it.
National average means nothing its where it is at that counts. macdunk

Halebop
16-12-2004, 12:24 PM
In the long run there are only two things that count for land values: Demograhics and the allied issue of population growth. Nothing else will affect real values long term, not even inflation. While interest rates, sharemarkets, speculative bubbles and whatever else can have a short term impact, land use and fundamental demand are the only real drivers.

The increased values enjoyed by coastal property owners is a byproduct of the baby boom (demographics). Baby boomers are buying the stuff as lifestyle and retirement options. While this trend may last another 10 or even 20 years, this is a very finite event. The same buyers have not given consideration to issues like amenities, healthcare and proximity to family, all much more important when they are in their 60's, 70's and 80's than their 40's and 50's. While there will be some sustained winners (the likes of Tauranga) I'd expect a reversal of this trend as a greater proportion reach the appropriate age and chose or are forced to sell into the approximately 10 year "gap" that GenX'ers and those following will be unable to properly fill. At that point I'd expect regional coastal properties to relatively underperform in the absense of any other demographic pressures to assist. There could well even be a few 1920's Miami style deflations in marginal locations like Far North Queensland.

As the commercial, population and increasingly financial capital of NZ, Auckland would still be seen as the long term winner. As the political capital, Wellington will always be underpinned by tax dollars and so is likely to remain the most stable market, unless ACT get into parliament and slash gross tax rates to 20%! (Yeah Right!)

P.S. Probably a bit naughty to leave out Productivity Growth as the 3rd driver of property values but I kind of view that as part of demographics.

Capitalist
16-12-2004, 01:04 PM
Some good points there Halebop dude. Immigration is also a driver. With the i-net land is advertised worldwide and the foreigners and Shania Twain types love it. My bare land has not cost me 1c apart from rates- it has not even been cleared, and is still appreciating at a great rate of knots.

As MacDunk says - know where to buy.

Bling_Bling
16-12-2004, 01:14 PM
Thanks guys for your info, very much appreciated and very informative. All those farmers that have land near the city must be laughing all the way to the bank. I have also noticed that dairy farm lands have appreciated tremedously in the last few years. Immigration seems to be picking up again. The government wants more immigrants in to help our labour force shortages.

:)

Steve
18-12-2004, 09:28 AM
quote:Originally posted by Halebop

Bare land historically has been a quite good investment but usually presents lousy cashflow charactersitics.

What I have done over the last 5 years has been to make purchases in good suburbs that have an older, unrenovated house (eg: a 90 year old villa) on a decent section. They are rented out cheaply for the interim to provide a bit of cashflow cover for the mortgage, then the houses are either removed or stripped down for the wood to leave a decent section in a good suburb ready for building on...:)

Bling_Bling
06-01-2005, 05:47 PM
Hey guys, this property market is not laying down. Noticed that the prices of most properties are still on the rise. Crazy !

Steve
07-01-2005, 04:09 PM
Yes, it does appear that a few CRYSTAL BALLS are out of sync with the market, but that is what creates OPPORTUNITY...

Bling_Bling
10-01-2005, 02:39 PM
Check this out. Bach in Nelson goes for over $2 million.

http://www.stuff.co.nz/stuff/0,2106,3152085a10,00.html

Steve
11-01-2005, 10:09 AM
I saw it on the news a couple of days ago. The funny thing was that I was in that part of the country last xmas/new year and I never even noticed it sitting there right on the beach...

Bling_Bling
11-01-2005, 01:31 PM
I really dont undertand paying $2M for a waterfront bach. What is the size of the land? What will happen with global warming and rising of the sea?

duncan macgregor
12-01-2005, 03:51 PM
BLING BLING, never mind the waterfront bach look at some of the shares people invest in. At least with global warming they migh start up a marine farm EH. CHEERS MACDUNK

Bling_Bling
16-01-2005, 02:59 PM
It will be some very expensive marine farms. Around $1 million for 900 sqm. LOL

Steve
16-01-2005, 06:28 PM
quote:Originally posted by duncan macgregor

BLING BLING, never mind the waterfront bach look at some of the shares people invest in. At least with global warming they migh start up a marine farm EH. CHEERS MACDUNK


I love your sense of innovation, MACDUNK. Keep it up and you may take over the world...

Bling_Bling
24-01-2005, 04:16 PM
A $250 million purchase has kicked off plans for a new city centre on Auckland's North Shore. Greg Ninness reports.

http://www.stuff.co.nz/stuff/0,2106,3164525a13,00.html

Bling_Bling
26-01-2005, 04:13 PM
Albany is going to be a size that can sustain a commercial CBD area. People that live in Albany and the shore will not need to drive to central city in another 5 years time. Land owners with large blocks of land in Albany will be worth alot now.

JBmurc
06-04-2005, 09:12 AM
quote:Originally posted by KW

I would suggest you get to know not just the area, but who is operating within it. For instance, Queenstown has been going through a property boom, but I have heard that currently over 2000 sections are due to be placed on the market shortly as a result of developers heading there in droves.

I live and have developed three spec homes in the last three years in queenstown plus watched the market closely for more than 6yrs (over which most land has risin as much as 500%:))with 2000 sections due on the market soon(still many months away) :(huge rising in home building costs 100,s of homes for sale[xx(]10% interest rates by yrs end-the bust is only months away,with many large developers verging bankrupt , selling of the plans 10,000persqm for most of there aparments-trade -my money going ASX in the form of oil,gold,copper,

cdt18
06-04-2005, 09:45 AM
There was a land developer in Cromwell that went bust a few months ago. I think he had about a 100 section development, and the section buyers are now creditors.

duncan macgregor
06-04-2005, 04:56 PM
What most people have to understand is that it costs a lot of money, and unexpected bills in developing bare land. This is a very risky business if you borrow to much, and time the market wrong. On the otherhand if you time the market and borrow heaps you will win out big. macdunk

JBmurc
06-04-2005, 10:21 PM
quote:Originally posted by duncan macgregor

What most people have to understand is that it costs a lot of money, and unexpected bills in developing bare land. This is a very risky business if you borrow to much, and time the market wrong. On the otherhand if you time the market and borrow heaps you will win out big. macdunk

yeah i know much the same in spec-building costs only going up
even with a gross sale of 862,000 to many costs will mean my company will make very little from this job , even though the land was brought 70,000-80,000 cheaper than whats on sale now[xx(][xx(]

trackers
12-04-2005, 10:45 AM
in case the original author is still wondering lol...the average price is something like $250,000. dont c that that should help you much but there u go.