Build or not to Build

I am trying to determine what would be a better option for me.

I have a hold on a block of land since Jan 2003 which can be mine in Jan 2004.

I was planning to build a house and sell it as soon as it was finished.
Total costs for the house would be $310k included extra $$$$ for blowouts on construction costs. This includes tiles
The house that I would build would be similar size, slightly different design but more modern finishing.
If it takes 9 - 12 months to build the house it would be Dec 2004 roughly when I will be able to move in.
The area is experience 8.8% growth in the last 3 years and climbing.
Reason behind the growth is that a Marina is being build nearby (1km away) which will be finished in 2 - 3 years.
The city next door (approx 5km away) is experience an average of 15% growth in the past 3 years and last 12 months it had shot up 20% - 30%

I owned a house in the same location about 100 meters away which was sold for $350k in Feb 2003.
The house itself was about 3 years old.

I have 3 options:

Do I build the house and sell it making a nice little profit of at least $40k minimum after fees is deducted
Live in it, use the equity to purchase other properties
Don't build at all

What do you think?