I’m seeing nothing that convinces me that anything has changed or turned around. Whenever you see an article telling you differently, please read it all, to the end, where oft lies the truth or a disclaimer!
In my City the Council has foregone $35 million in developer fees to ‘kickstart’ new projects. If a project can’t stand on its own with those ‘normal’ fees in place and has to rely on the local authority taking a haircut, then the project’s chances of failure are high. I’ll keep an eye on the list of projects that have miraculously ‘come on’ during this amnesty period to see how they fare. A couple of phone calls and I discovered that many of the projects were going to go ahead anyway, and that the ‘discount’ on local government fees was just a bonus. Government interference in free enterprise – it never works.
So everything is going UP is it? Almost every real estate article you read says so so it must BE SO! No.
Big sale of a site in Southport for 3 million dollars! Wow! Whoop-de-doo! How about the poor schmuck who got his timing wrong when he paid 5 and a half million dollars for it at the very peak of the craziness in early 2007. Add to the obvious loss of 2.5 million dollars the holding costs over nearly 7 years and I wouldn’t be surprised if he watched double that go down the toilet.
Of course there’s always going to be the “odd” sale that surprises everyone. I know that. But they are rare and there’s always some quirky reason why someone has apparently paid too much. I know of one in a capital city where everyone said the buyer was “nuts”. But was he? No-one at the time (not even local guru agents) knew that the blocks of land either side were already held by interests associated with him and that securing the third parcel made the whole piece of land so much more valuable as a height restriction went from 4 to 8 or 10 stories as a result. Smart I’d say.
I lived at a fairly famous Resort on the northern end of the Gold Coast many years ago because I wanted to try the lifestyle. 6 months was enough. I was ‘out of there’… In the early 1990’s vacant blocks of land (non-waterfront) were changing hands for $500,000.00 and all the “wannabes” lapped it up. It was fine marketing spin at its very best. So exclusive and so magnificent was the Resort that today, more than 20 years later, dry blocks are selling for….wait for it…..$500,000.00… Oh dear.
Last but not least – commercial. Tenants renegotiating rents down 50% or more and basically holding landlords to ransom is the business of the day. My local newspaper is full of “Mortgagee In Possession”, “Liquidator”, “Owner wants out”, “Overseas investor quits holdings” and other negative headlined commercial property for sale. These local agents are so duplicitous it makes me sick. One one page they talk up the market like its the 2004 rocket sled, and yet at the back of the paper they try and suck you into a BARGAIN as a bunch of poor sods are forced to offload their property as drastically discounted prices.
I rest my case and step off my soapbox for this week.