Saturday, September 24, 2011

Is It Big Enough?

So we received this comment on the last blog post recently;

"Is Nolan 41 is big enough? what do you guys reckon? I am interested in a big home, should I go for Nolan 50?"

Kind of a hard question to answer I think. What's big enough for a married couple with no kids might be much too small for a family with 5 kids, in-laws and a lot of visitors. And in the second part of the post, you say "I am interested in a big home" - so why not just go out and build a 100 square + hotel?

Or buy one already made, like this on in Doncaster East... it's only got 5 bedrooms and an 8 car garage!

Apart from personal preference for "a big home", there are other reasons for considering alternative sized dwellings. Most population studies point towards growing number of single-occupancy dwellings, so someone looking to start an investment portfolio or develop residential property might look more towards compact, single-person dwellings with good access to public transport. For example, with a 700m block you could develop a large single house targeted at the upper end of the market, or construct 2-3 small townhouses - cheaper entry price, larger target market, easier resale, perhaps greater rental potential as well. However, if it's for your own personal family with no immediate thoughts towards resale, then build what you like - it's your mortgage after all.

Do you really need "a big home" too? A larger house will cost more to build nett than a smaller house (though interestingly enough on a per square meter basis it usually works out far cheaper). You can also factor in higher ongoing costs in terms of utilities, council rates, insurance, furnishing etc.

But ultimately, just go and buy the Monarch 58 for sale in Balwyn, a steal at just $2.85m. It's on Domain here, or Realestate here.

We covered the pros and cons of buying a display home earlier. This particular development we've visited a couple of times becuase it's quite near our place, and follows the usual inner suburban display style of white tiles, dark wood, and lots and lots of styling and building features unavailable to "normal" customers. You'd hope this display home is built to a decent standard as well; at least you don't have to deal with the occasional depressing elements of house building! With the Balwyn median price of about $1.5m, this display home offers quite reasonable value for the area with a huge block (910m in Balwyn is enormous!) and many superexpensive upgrades. The base price for a Monarch is something like $480k, but with the upgrades and landscaping I wouldn't be surprised if the build cost alone was around $1m. Not real keen on the main road location however, Belmore Rd is a nightmare to drive through in the morning and afternoon peak hours.

Finally, went and walked the dog to an auction on the next street to ours this morning - an old place on 800sqm passed in at $700k with a reserve probably north of $800k, which makes it the second one in our immediate area to pass in at auction. Who knows where the property market is going to go in the next few months?


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