Wednesday, February 15, 2006

Equity mate...

I got some news yesterday that made me feel pretty good about building a house.

Across the road from our yet-to-be-completed house is another yet-to-be-completed house that is at about the same stage ours is at. We have met the people that are building the house, the guy used to work up at the HBI Plant in Port Hedland as a sparkie before it was shutdown. Well they are off to Melbourne for a new job now and will be putting their house on the market once it is finished.

It is a Ross North home, 4 bedrooms, 2 bathroom, games, semi-home-theatre, big kitchen and drive through garage, all on approx. 730 sqm. The price they are asking is $410,000... That is without any floor coverings, blinds or painting. And possibly even no landscaping out the front.

We definitely think we got in on the home building game at the right time. Although we don't plan on selling for at least 5-8 years, it is very nice to know that after only 'spending' (someone elses money) $280K, we may have over $100K in equity in just 12 months. Will make it easy come refinancing time in a year or two to package in a large patio.


Tom said...

$410k, geez.

I can't help but wonder how such real estate growth is sustainable.

It feels like already many places are over priced, but it is a supply and demand equation like everything.

How many more years of growth is left? And when it stops, will it recede a fair way or not much at all?

It is ironic in a city with so much empty space that people are paying such enormous prices for land.

Craig said...

Baldivis is definitely a freaky area. There are houses out there on normal suburban blocks that are selling more than places less than 30 seconds walk from Warnbro Beach.

I don't think this housing boom is sustainable as wage growth is not keeping up with house prices. Over east, real estate growth has levelled off. WA will follow eventually, but while our resource boom continues, there will still be people with lots of money.

Anonymous said...

then you get us poor folks in baldivis 'central'... one on the corner opposite us just sold, dunno how much for, but there's probly half a dozen half-finished houses already with for sale signs out the front. can people really make a quick buck? and why wouldnt someone just build a house for cheaper than someone else has just done it.

there's still enough land in estates these days to allow you to buy your block and build a house much cheaper than buying "established" (half finished)