All Topics / General Property / Newbie looking at Property Dev in Hervey Bay

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  • Profile photo of Dave7Dave7
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    @dave7
    Join Date: 2005
    Post Count: 3

    Greetings all,

    This is my first post here, and Im new to the property market and looking at my first IP.

    My plan is to buy land a few blocks back from the beach in Hervey Bay and get 3 or 4, 3-bed bungalows built on the land, then sell. I will put down 150K, get bank mortgage for 850K.

    Im just a bit nervous about it being geared so heavily, with all the talk about a property ‘crash’ (eg. Economist article)

    Can anyone give me some advice please – am I biting off more than I can chew? Should I wait longer to see if prices drop further?

    Thanks

    Profile photo of johnalcjohnalc
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    @johnalc
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    I know of an area just Nth of Hervey Bay (Burrum Heads) where beachfront land is available from around $320,000.00 suitable for a duplex,blocks are 950m2.This to me would sound like a much more viable development with not as much outlay. Drop me a line if you woud like to know more

    John

    John

    Profile photo of elyseanelysean
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    @elysean
    Join Date: 2005
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    Be careful in Hervey Bay, the big boys have been there a while and the council is starting to talk about slowing down DA approval (not that they can go much slower).
    Burrum has ot yet started to do much, so if I was going there I would sell off the plan.
    Regards

    Property Acquisitions for developers and investor from; Kevin

    Profile photo of Jenny1Jenny1
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    @jenny1
    Join Date: 2004
    Post Count: 269

    Hi Dave7

    There has been alot of talk with Jetstar and Virgin going into HB with the extention of the airport how the place is going to boom…. Also know of a Technology Park going in soon….[blink]

    If you look on the internet for places that are advertised to rent you will find Hervey Bay has(73) Urangan (16) along with Burrum Heads and alot of surrounding areas with all empty rentals. These places have been on the net for along time (including mine)infact in a previous thread I asked for how to get a tenant in after dropping the rent etc.

    I ended up sacking the agent getting another and still had property vacant for another 6 weeks (finally rented today yippeee)all in total vacant since late April ouch. Was only thinking I will get rid of the property as I have other projects and HB was becoming a financial drain.

    If I would suggest anything it would be to do lots of research, don’t get caught up with the hype, speak to the agents and they will tell you straight. [biggrin]

    Good luck

    Jenny1

    Profile photo of DazzlingDazzling
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    @dazzling
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    Well done Jenny for finally getting it leased. Looks like changing PM’s was a good move. It’s a shame bad PM’s don’t wear a cap notifying you of the fact up front hey.

    Sounds like you were touch and go there for a while about pulling the plug on HB.

    Good luck with it all.

    Cheers,

    Dazzling

    “No point having a cake if you can’t eat it.”

    Profile photo of Jenny1Jenny1
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    @jenny1
    Join Date: 2004
    Post Count: 269

    Thank you Dazzling

    Yep I was thinking should I pull the plug on HB or not, I feel the place will go but when I don’t know (we all need a crystal ball). I will monitor closely over the next 12 months.

    Fingers crossed with the tenant (previous applications that I received were all knocked back as they all defaulted on their rent!)he and young family are on Centrelink payments but condition of lease is that payments are electronically transfered to my account each week.

    Ended up a great week after all as I got a tenant and I sold hubby’s car.[biggrin]

    Dazzling take care

    Jenny1

    Profile photo of johnalcjohnalc
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    @johnalc
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    Sorry to hear about your bad run with the agents in HB , I on the other hand have had agreat deal of better luck in Burrum Heads where i have just completed a dual occupancy and i now have them both rented at $240.00 pw at an overall cost of $400,000.00. Good tennants both are building in the estate so I will get a good nine months out of both them untill I turn it over and get a fresh batch of new home builders come along.the estate (dolphin waters) has another 1100 more blocks to develop , with most of the buyers retired ,sold their family home and looking to rent while their dream home is being built.1100 more house blocks and other developments dur to start at Burrum as well .In reference to the amout of rentals available at Burrum Heads most that are available are for holiday rental so therefore they will alway be advertised as available. The new arrivale are looking for somthing unfurnished so as they have somewhere for their own belongings

    John

    Profile photo of foundationfoundation
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    @foundation
    Join Date: 2005
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    Hi John, do you really think it is ethical to spruik overpriced, low-yielding properties in oversupplied areas (with practically no geographical limit to expansion)? If that is indeed ethical, should you not at least disclose your interests in this development? Are you not treading dangerously close to a landmine?

    User Name: johnalc
    Location: AUS
    Marital Status: married
    Gender: Male
    Occupation: land sales
    Total Posts: 2
    [0.01 posts per day]
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    Links
    Homepage: http://www.dolphin_watersestate_.com.au
    Cool Links: No link specified…

    I personally wouldn’t buy in this estate for $50k, let well alone $320k. It sounds like a real turkey, particularly if devious marketing methods are required to make sales.

    (see, internet marketing works both ways!!)

    F.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Don’t you love it when they start with an opening post about telling you what they do for a living or how they could sell you something.

    On a serious note Dave i have just financed a small residential development up in NB happy to work some figures for you if you would like.

    Cheers Richard
    Ph: 07 3720 1888
    [email protected]
    http://www.yourstatefinance.com

    Specialising in US & IP finance.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Alistair PerryAlistair Perry
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    Post Count: 891

    Hi Dave,

    I think from memory Roy Halabi, who posts as GPSNetwork, is active in Hervey Bay. If my memory serves me correctly he will have a massive amount of info on the area and would be a great guy to speak to. You will find him on this forum or else you can email him at [email protected]

    Regards
    Alistair

    Profile photo of johnalcjohnalc
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    @johnalc
    Join Date: 2005
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    Hi Foundation,
    I may have not explained my self properly, the property I have developed (dual occupancy) 2 homes on the 1 block both earning $240.00 pw ($480.00 pw total) at an overall cost of $400,000.00 to develop (land and both homes).To me this is proving to be a very sound investment.
    Yes I do sell property in this area (Burrum Heads) but is it wrong of me to speak of something that has worked for myself. At the end of the day people can do the sums and make their own decisions.

    John

    Profile photo of johnalcjohnalc
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    @johnalc
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    Foundation,
    The land that I spoke about for $320,000.00 has all been sold (Resales available)(which i dont sell) and so there is no financial interest to me at all except that it is land that is on my radar once im in a position to purchase.
    This land is 950m2 and suitable for a dual occupancy and each house would sell for around $425,000.00 eachhouse about 170m2 in size.You sound as though you have a bit of knowlege of the area why are you so negative about it.This is of interest to me as i am a keen investor and never jump in where i dont see value for money.
    Cheers

    John

    Profile photo of foundationfoundation
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    @foundation
    Join Date: 2005
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    John, you wrote:

    the estate (dolphin waters) has another 1100 more blocks to develop , with most of the buyers retired ,sold their family home and looking to rent while their dream home

    and

    Occupation: Land Sales

    and

    Website: Dolphinwaters

    and when I call the sales office the phone is answered by

    John speaking

    yet you claim:

    there is no financial interest to me at all

    What **deleted**, is this not your job ?! Or don’t they pay you?

    [angry2]F.[cowboy2]

    PS – anybody interested in purchasing property in the region should stay away from dishonest salesmen. I’m not claiming the previous poster is one (save the lawsuit, <edit> my good friend), just making a general comment!

    Profile photo of wilandelwilandel
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    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi John,

    As an investor active in the HB area, I’d like to see your data to PROVE that the houses would sell for around $425,000…. I think you have a good imagination.

    There are still lots of facilities to be put in the area before blocks start to really sell. This is going to take years.

    Most blocks are not selling AT ALL in Burham Heads and developers seem to be selling off whole developments to walk away from them. I know because I looked at buying one not long ago. I am moving to HB in 4 weeks and I have seen Dolphin Waters Estate and others.
    PS – I do love the Burham Heads area. It is a great area.

    Regards,
    Del

    http://www.nzpropertytogo.com

    Profile photo of johnalcjohnalc
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    @johnalc
    Join Date: 2005
    Post Count: 7

    Foundation,
    Its obvious you dont like developers or you would not be so hostile towards me about my comments.
    But its not like i havent been totally transparent with other posters.
    I guess you must be right though and the three hundred or so people that have bought in the area in the last 2 and a half years must be losers like my self as you have exposed (good work **deleted**).
    If anyone does happen to venture into Burrum Heads go talk to the real estate agent. otherwise you may also be on the end of a parnoids rantings if you were to talk to the nasty saleman.
    other areas of interest in HB are Dundowran Beach and Craignish
    By the way foundation we dont sell in these areas
    Cheers
    john
    Dolphin waters land consultant

    John

    Profile photo of DazzlingDazzling
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    @dazzling
    Join Date: 2005
    Post Count: 1,150

    “Play the ball – not the man” gents.

    A few of the above comments wiped.

    John – Del asked a pretty good question. Do you have any data to back up the numbers you speak of. Of course you are not obliged, but if you feel the need it’d be good to see.

    Cheers.

    Profile photo of foundationfoundation
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    @foundation
    Join Date: 2005
    Post Count: 1,153

    Fair enough Dazzling. Apologies all.
    F.[cowboy2]

    Profile photo of johnalcjohnalc
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    @johnalc
    Join Date: 2005
    Post Count: 7

    Point taken Dazzling.
    Del,
    Please take this on face value as I am a investor just as much as anybody else ,it just so happens that I work in the industry (land sales) so it may look as though I have other motives other than simply discussing investment opportuntities around Aust.
    Beachfront land now has become very expensive on the Fraser coast in the last 3 years.In fact anything close to the beach or with water views has a price tag of at least $300,000.00 . Beachfront is around $450,000.00 to 1 million and over depending on the block and the location.
    The beachfronts I speak about at Burrum are the cheapest around and have the potential to be duplexed strataed and sold off individually.A friend of mine recently (12 months) purchased a unit (off the plan) in Hervey bay (esplanade position, 2 bedroom)and has since just resold it for $500,000.00 this price is now not uncommon for units in and around the Fraser coast, these unit developments have huge body corporate fees attached (around $5000.00 pa)with this price tag and fees these propertys are very heavily geared. So getting back to the Burrum beachfronts ,950 m2 block split down the middle , two storey 3 bedroom 160m2 unit ,beach and sea views 100m walk to the beach no body corporate fees, room for your own pool,spa to me $425,000.00 sound very resonable for a unit in a growing town close to a major growth area (Quoted as the 2nd fastest in Aust)interstate air travel beaches and a great climate, The data i have quoted can be gotton from realestae.com or ring an agent and do some investagating for yourself or read the data i have attached below,
    and before you say you cant belive everything you read (I dont) but I do think if you find the right property or develop at the right price not just in Burrum but anywhere close to the water on the fraser coast now is a good time to buy and hold .Thats my opinion anyway , comments good and bad would be appreciated.
    Cheers
    john
    see below

    ‘Seachange cities’ to reinvent themselves over first three decades of 21st century
    09/06/2005

    Selected coastal cities in Australia will reinvent themselves over coming decades as strong population growth and new households trigger a surge in the demand for new dwellings, according to a recent KPMG study on Australian housing.

    KPMG carried out the landmark study, Australia on the Move, for the Property Council of Australia. This important study provides an assessment of future demand for housing across 41 cities until 2031, and was released at a national conference of industry leaders in Noosa Heads today.

    The author of the study, KPMG Partner Bernard Salt provided crucial insights into what the future could hold for some key seachange cities.

    “In particular, the seachange cities of Mandurah, Hervey Bay, Sunshine Coast, Gold Coast and Cairns will more than double their housing stock over the 30 years to 2031; the housing stock in the industrial city of Gladstone will also double as a consequence of Queensland’s strong population growth.

    “The projected demand for new housing rises is sluggish in places like the Latrobe Valley, Adelaide and the three largest cities in Tasmania,” Mr Salt noted.

    Replicating a similar study completed by US think-tank the Brookings Institute last year which concluded that 38 per cent of residential property in America by 2030 would be built over the preceding three decades, KPMG’s Australian study concludes that by 2031 some 40 per cent of all dwellings will have been built over the preceding three decades.

    “There is both an opportunity and a responsibility for this generation to strategically plan for the future development of our cities and the infrastructure they require,” Mr Salt advised.

    OR

    Author: Report Tina Perinotto
    Date: 11/06/2005
    Words: 492
    Source: AFR

    Publication: The Financial Review
    Section: Property
    Page: 19

    Forecasts for Sydney’s population growth may be overblown and those for Tasmania far too pessimistic, according to ANZ economist Saul Eslake.

    Mr Eslake, speaking at a Property Council of Australia housing conference in the Sunshine Coast last week, was responding to the latest population forecasts from demographer Bernard Salt.

    While Mr Salt predicted that Sydney would need more than 800,000 new housing units by 2031, Mr Eslake said this might be too optimistic.

    In fact, Sydney had in recent years become “the lead in the saddlebags of the national economy”, with poor performance in employment growth and population, and it would not score so well in long-term population trends, Mr Eslake said.

    In his latest report Australia on the Move: Population Growth and Dwelling Demand, 2001-2031, Mr Salt has pinpointed the out performers and underperformers in about 40 major population centres nationwide.

    According to Mr Salt, Mandurah will experience the highest growth, with a 74 per cent increase in its total new dwelling stock between 2001 and 2031.

    This is followed by Hervey Bay, Sunshine Coast and Gladstone.

    Sydney and Melbourne are neck and neck, each recording growth of 40 per cent, well below the median level.

    Hobart, Burnie-Davenport and Launceston are among the worst performers in the Salt table, with housing growth of less than 25 per cent in the next 25 years, only marginally ahead of the worst-expected performer, Latrobe Valley.

    Mr Eslake, however, said Tasmania had come out of a long slump and would continue to perform well.

    NSW, on the other hand, lost about three-quarters of the migrants it attracted, Mr Eslake said.

    “In a sense, people are voting with their feet. NSW population growth in 2004 was 0.7 per cent half the national average,” he said.

    Mr Salt agreed that long-term trends could diverge widely from their trajectory.

    For instance, projections made in the early 1970s about population growth had proved broadly correct for the major cities, he said, except for one fact: no one had anticipated the Gold Coast’s popularity.

    Other issues could be “fundamental change” in immigration levels.

    “It could suddenly become fashionable to have babies. Or there could be further disintegration of nuclear families,” Mr Salt said.

    Even with the lower population growth overall, cities could “punch above their weight” and become magnets for people.

    This was possible with a coastal city, he said.

    Alternatively, he said it might be hard to sustain immigration levels in the global economy. Competition for skilled immigration might become intense because of globalisation and Australia might in fact find it difficult to hold on to its skilled young people, who could be attracted to other countries.

    Mr Salt stuck by his projections for Sydney.

    “Sydney is on its knees at the moment, but cities go through cycles. It’s almost as if it is at the height of the Olympics it’s taking a breather at the drinking station.”

    I have other articles if anyone is interested

    John

    Profile photo of wilandelwilandel
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    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi John,

    Thanks for the reply…

    You don’t have to “SELL” Burham Heads to me, I am already the converted – I LOVE IT. So does my husband, Will. He can’t wait to get up there to do some fishing! We would love to own a beachfront property there. We see the values there and Toogoom really jumping in a few years to come. I might come and see you in about 4 weeks when we shift up there!

    $425,000 for a BEACHFRONT NEW property does sound reasonable, but not $425,000 for a normal new property 5-10 minutes from the beach. There are estates up there selling land for around $120K for 1/2 acre blocks. These are a fair way from the water though, and I’m not sure on the covernants. I know that some covernants up there are very restricting. Not sure about Dolphin Waters convernants though.

    I was a little confused before with your posts. How far is Dolphin Waters Estate from the water. Is this the land you are referring to as beachfront. I’ve been there but I remember it being quite a fair way from the beach. There are lots of estates up there that are not selling at the moment though.

    I love reading Bernard Salt’s info on Hervey Bay. I am trying to get into Real Estate myself and I am very interested in the stats on the growth, but we were shifting there anyway (from Melbourne), because it’s a great area to bring up kids.

    See you up there,
    Del [biggrin]

    http://www.nzpropertytogo.com

    Profile photo of johnalcjohnalc
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    @johnalc
    Join Date: 2005
    Post Count: 7

    Del,
    Dolphin Waters is more on the river side of BH we only have lake blocks and dry blocks available now. The beachfronts I refer to are down orchid dr.The agents have all the resale listing out there now as we have sold them all ,I would like to show you the blocks to get your feedback ,it all helps . If you are to drop in my way please do so, at the dolphin waters site office next to the pub i promise I wont try and sell you anything it will be just an exchange of ideas from one investor to another.
    john

    John

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