Browse Forums Building A New House Re: House cost to land value ratio - avoid overcapitalising 9Sep 28, 2008 3:36 pm Sorry MJ,
My comments are in relation to suburbs where there is no land for development other than kdr's, as Joles said those established suburbs closer to the city where you pay a premium for land to begin with, rather than land developments on the fringes. Re: House cost to land value ratio - avoid overcapitalising 10Sep 28, 2008 5:01 pm MJ1975 \My point was that you'll get more of a premium for the RIGHT house. Doesn't that also depend on the buyer? I've seen some fairly average houses go for way more than estimated because 2 competing buyers fell in love with the place. Our house:land ratio is about 0.75:1 - but Sydney land is hideously expensive. After 4 years - we're in! Re: House cost to land value ratio - avoid overcapitalising 11Sep 28, 2008 5:17 pm By "right" house, I mean a house of appropriate quality given the quality of the land. A 50k tin shack could be the right house in certain circumstances.
Quote: I've seen some fairly average houses go for way more than estimated because 2 competing buyers fell in love with the place. By definition, if 2 competing buyers fell in love with it and pushed the price up, the house would generally not be average, no matter what you or I thought. And if it was average, then the vendor got lucky. So 0.75:1 in your case? My guess would be this ratio would be common in large parts of Sydney where there is a high floor price for land of any quality within 30km of the CBD. Other capital cities seem to have more of a "low end" range for land or knock-down possibilities. Re: House cost to land value ratio - avoid overcapitalising 12Sep 28, 2008 9:15 pm Ours will be 0.83:1 (I just worked it out on my calculator and can see Jo's nerd radar pointing at me now )
By the time we do driveway, window furnishings, light fittings, alfresco, landscaping, it will be 1:1 if not over. Re: House cost to land value ratio - avoid overcapitalising 13Sep 28, 2008 11:07 pm Ours will be roughly 0.5:1. Yes, Sydney is horrendously expensive, particularly in the area I live in. We pretty much plan on staying there forever though, so it's worth it.
Judie Re: House cost to land value ratio - avoid overcapitalising 14Sep 30, 2008 11:18 am With regards to the house to land ratio, does the house price include all the extras like landscaping, flooring, curtains. Or just the raw price that you pay the builders? Re: House cost to land value ratio - avoid overcapitalising 15Sep 30, 2008 11:57 am Ours will be 2:1 - this is for everything except the rear landscaping and curtains (may be using old sheets initially). We are building in the ACT. 'We make a living by what we get, but we make a life by what we give.' - Winston Churchill Re: House cost to land value ratio - avoid overcapitalising 16Jul 11, 2022 12:11 pm Ours will be 1:2.3. beach suburb . land is $600, build will be $800-$850. Purchased a lot with a wider frontage to achieve a three car garage. 5 bedroom + office. We are in a comfortable position so feel it's nice to add an extra bedroom and more car space. Can't say how long we'll live there but we don't plan on moving any time soon. Have a young family, so intend to say put for a while. I think these extra items *(incl space/ sq m's ) will help our home stand out amongst the crowd, when we do come to sell. Finding a builder who can achieve a quality looking home helps too. Re: House cost to land value ratio - avoid overcapitalising 17Jul 11, 2022 5:04 pm overcapitalising usually means don't build things like pool, fireplace etc, unless you actually need it, or it's expected that the kind of house you're building should have one. or don't put a fancy kitchen or bathroom in, if the rest of the house looks like trash. if you're building a house for yourself though, an easy way to not overcapitalise is to not think about the items that you like to have in your house as capital investment. think of them as just things you want to treat yourself with. as long as you can afford it, and don't expect to get any kind of return from it when you sell the house - it's not overcapitalisation It pains me to do this, but I feel that I need to get the word out and ensure others don't have the same outcome as me. Avoid dealing… 0 1331 The last home I lived in didn't have a pool and when i went to sell it the agents were not happy, even telling me to put one in to sell the place. The agents weren't happy… 2 4674 |