Browse Forums General Discussion 1 Oct 13, 2013 8:40 am Hi All As you would have possibly seen from my intro post, I am a complete noob to property and this will be my first potential purchase. My wife and I are looking at buying a house and land package in Paralowie, SA. I am originally from South Africa and from what I understand and this is purely hear say, it is not the best suburb in Adelaide, but has everything you would need. From what I could find it seems to be the cheapest land ($/m2) within a 20km radius of the city. We looking at house and land for about $400000. That will be 4 bed, 2 bath, 2 garage on a 580m2 block in a brand new development. This will be owner occupied for about 3 - 8 years and the plan is to use the equity in this house to purchase another property which will become our prime residence and this house will become a rental. My question is the following: How do you work out if you’re over spending in a specific area? The reason I am asking this is that I have done a quick search on realestate_com_au and there are very few existing houses that are around the $400000 mark. On the other hand, I think well it is a brand new house in a brand new estate so maybe I can spend that amount of money and in 5 - 8 years have decent equity? I would love to hear your thoughts! Re: Over spending in a certain area? 2Oct 13, 2013 9:33 am I think it is a gamble, it is extremely difficult to understand what is going to happen in the property market and if a new estate is going to boom or flop. Being from Melbourne I am tempted to say that any house for $400K close to the CBD is a bargain, but I know our property prices are pretty steep compared to a few other states. When I buy a house (this is my third build) I try to look at the area and gauge I it has everything I want, if it will suit my needs now and into the future. If I feel comfortable within the area, etc. I figure if I seem to like it, others will also. As long as you build something that fits into the 'normal' scope for the area, roughly the same size as other houses (family areas tend to have more bedrooms, retirement areas seem to have less bedrooms). I know I haven't really answered your questions, but hopefully it gives you something to think about. Re: Over spending in a certain area? 3Oct 13, 2013 11:48 am Its never a good idea to have the most expensive house in the street, or the development, so be guided by what has already been built. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Over spending in a certain area? 4Oct 13, 2013 1:40 pm Can I suggest you post this on somersoft.com forum under Where to buy. There are many investors there, some of whom invest in that area. They may be able to more fully answer your questions. cheers. Re: Over spending in a certain area? 5Oct 13, 2013 2:41 pm Paralowie really isn't that bad a suburb. People who say so are simply ignorant because it is close to places like Elizabeth. Sure it isn't Burnside but I have lived there for 25 years and if I wasn't moving more country I would continue to live there. Great affordable area. Never had anything bad happen to my family or I. A majority of people are average hardworking people. The north of Adelaide cuts a bad rap and some of it is admittedly rightly so. I am a bit of a crime buff so I have reviewed the crime rates and some of them for certain offences are higher but people often forget to look at the population of an area and the northern suburbs also has the highest population of all the areas in Adelaide so it is probably not so surprising. Building the Leabrook with Fairmont Homes in Mallala, SA. Building contract 24/3/13 Council Approval 18/6/13 Selections 29/6/13 & 1/7/13 Site works 21/10/13 Slab 7/11/13 Re: Over spending in a certain area? 6Oct 13, 2013 3:17 pm Thanks for the replies thus far, much appreciated!! There are currently no houses at all within this new development. Stage 1 is only 70% sold and we are wanting to buy in stage 2 which is more towards the middle of the estate which would take us off the main streets. It would be one of the bigger blocks within the development but very odd shape. Under 10m upfront and out to 28m at the rear of the block. I don't think that North of Adelaide is all that bad either but when I have mentioned Paralowie to people, they kind of expect you to justify why you wanting to buy there, simple answer for me is that I can afford to!! I will try the other link mentioned and see what else I come up with!! Re: Over spending in a certain area? 7Oct 16, 2013 8:41 pm It is not a bad area really... Friends have lived there and had no issues, having said that however doesn't mean it's a wise investment. People will always have issues buying there (ignorance or not) there will always be those people out there. I would definitely have a chat to a property investment channel, like the mentioned Somersoft forums. If you were planning on setting up shop for a long term family home, I'd be inclined to say ignore the hate about the area and if your comfy living there, go for it! But because you are planning on leaving in less than 10 years, you might have an issue, not set in stone, but it is riskier. Not to mention in Lower socio-economic areas, being a landlord of a rental that falls within one carries it's own risks. There is a lot of re-development in those areas going on & who knows? In 8 years time it may be an area that is sought after and in high demand, much like the Christies Beach area now. Have some discussions, talk to experts and try and try and look at it with your head & not your heart. You may be on a winner! Or, You may be about to flush some $$ down the toilet... I grew up in the North and get a bit defensive when people automatically down it & say it isn't wise buying there, but I have to remember that there can be some merit to it... Again heart vs head. All the best Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Over spending in a certain area? 8Oct 20, 2013 2:24 pm deluxes It is not a bad area really... Friends have lived there and had no issues, having said that however doesn't mean it's a wise investment. People will always have issues buying there (ignorance or not) there will always be those people out there. I would definitely have a chat to a property investment channel, like the mentioned Somersoft forums. If you were planning on setting up shop for a long term family home, I'd be inclined to say ignore the hate about the area and if your comfy living there, go for it! But because you are planning on leaving in less than 10 years, you might have an issue, not set in stone, but it is riskier. Not to mention in Lower socio-economic areas, being a landlord of a rental that falls within one carries it's own risks. There is a lot of re-development in those areas going on & who knows? In 8 years time it may be an area that is sought after and in high demand, much like the Christies Beach area now. Have some discussions, talk to experts and try and try and look at it with your head & not your heart. You may be on a winner! Or, You may be about to flush some $$ down the toilet... I grew up in the North and get a bit defensive when people automatically down it & say it isn't wise buying there, but I have to remember that there can be some merit to it... Again heart vs head. All the best As patronising and demeaning the tone of this comment is I would respectfully disagree. Not only have I been a real estate agent for many years but I have owned my own home in the area, my daughter lives in the area (who I might add is not considered "lower socio-economic" but is infact the owner, along with her husband, of a very successful business and chose to live there with a view to having children and being able to afford to stay home for as long as she chose following that) and I have owned a number of investment properties in the area and this information is just not correct. An example is one investment property I owned in the area sold for 200% more than I paid for it to be built following a 20 year period. Yes, that is a long period but the return was fantastic. This is a highly sought after area for the simple fact that it is considered one of the better areas of the northern suburbs, it is close to the city with many amenities at your fingertips yet is relatively affordable. The existing house market is rather low but the land is not so which shows that it is a sought after area. A 500sqm piece of land will cost around $180,000 which is hardly considered cheap. Not to mention just because an area like this has a reputation does not mean people will not live there. Those who seek affordable accomodation will most certainly buy there. It is like saying people don't want to buy in Munno Para because it is situated right next to one of the most undesirable locations in Adelaide, Davoren Park, and the area is having one of the biggest booms in all of Adelaide. Clearly, people will live somewhere which isn't considered a fantastic area because it is affordable for the average person. Also, you will see the house prices in this area rise once the grants for new builder's are lowered/stopped. Before these grants were in place I sold many a property in Paralowie for as high as $500,000+. As for the assertion that renting your property you will have trouble, wherever you have an investment property if you don't screen prospective tenants properly you will have issues so again I disagree. I have had many a "lower socio-economic" people in my investment properties over the years and very few times have I had problems. One of my friends did once sell an investment property in Norwood as she constantly had issues as in some of these areas the high rent means many people would share the home and the property was then used as a party house otherwise it would sit dormant. I hope that information is helpful to the poster. Re: Over spending in a certain area? 9Oct 21, 2013 8:57 am The question you ask is hard to predict. As a family home I think you will prob be fine however if you are wanting to make money in the short term then I am not so sure. Your spend is probably up there as you say based on real estate.com so that would indicate to me that it could take a while for you to profit. However the housing market is a gamble so who can really say. Also is it a house and land package? Because I am thinking due to the shape of land if you can't fit an off the plan house on there then there may be additional costs involved. Also with selections try to keep costs down if it is primarily an investment. Good luck with your decision. CDC Housing Code 3 When to apply Floor Area external face of wall vs Gross Floor Area internal face of wall. Reading thru CDC Housing Code 3, lets take a lot 915sqm.… 0 16537 Hi everyone, Looking for some advise. We are about to build an above ground pool in our backyard. There is a private sewer line running under the pool at 1.6m… 0 11731 Much a do about nothing. 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