The media is currently packed with real estate ‘doom and gloom’ – real real estate repossessions and arrears are up and real house prices are down… the almost as if the ‘sky is approximately to fall’! This situation has seen many real estate builders, and property investors generally, leave the market – and for those thinking of beginning real real estate development, these are generally scary times indeed. Keith Knutsson
What seems like the worst the perfect time to get into real estate development can, in reality, be local plumber. Successful real real estate developers today realize that they can use the perfect time to their advantage – their real estate development jobs will typically not be prepared for sale or rent for 2 to 4 years from inception. So if they have bought well, they may be less likely to be damaged by the economical situation at the time of purchasing their real estate development site.
Actually a weak market is a property developer’s paradise, because a fragile market is a potential buyer’s market, and one of the first steps to any real estate development project is securing a viable real estate development site on the best possible terms.
Although we can say that the real estate development business is cyclical, and many regions of the world are in a house downward spiral, we also know from history that knowledgeable real estate developers are successful in any market – falling, flat or increasing.
We’re working towards whatever we believe the economical conditions will be in doze to 36 months time. Indeed we ourselves are still active in the market – seeking Authorities permission for a quantity of real estate development projects. This gives all of us the possibility to act quickly and build our approved real estate development jobs when the market does indeed become buoyant.
It is our view that the following market signals are some of the key factors that will lead to increased future opportunities, specifically for real estate designers:
? The pent up demand for housing. In Walk 2008 leading Australian economics forecaster, BIS Shrapnel main economist Dr Frank Gelber argued that housing prices across Australia will go up by 30% to forty percent over the next five years due to built-up crisis of housing.
? The current Authorities has explained that they will work at increasing Housing Affordability and possess begun to announce bonuses including Tax Credits of $6000 per year if the housing is booked at 20% below market rent.
? We believe progressively more people, in the brief to medium term, probably require the rental accommodation that we intend to build. It is because either their financial stress (can’t find the money for to get a home) and demographic trends (including Gen-Ys who are much less likely to buy Genuine Estate).
Even if our ‘crystal ball’ is inappropriate, we know we certainly have the resources to hold real estate development sites during possible further market variances to come, and increasing rents are certainly supporting recover!
Our belief is that this is a golden time to action – perhaps an once in a generation opportunity. Maybe it is not the time to sell completed real estate development projects at the second, but that is definitely a great possibility to secure the development site and obtain development planning endorsement. Now this strategy is not for everyone – you must have the necessary resources to carry the development site and especially the information of real real estate development to take good thing about these opportunities.
The best approach for anyone thinking about real estate development will rely upon his or her own personal and financial circumstances, but the key message here is that you must do something!
There are plenty of strategies that small real estate developers are currently using, if they don’t have the time to complete a real estate development project right now, including to convert their real estate knowledge into cash by finding ideal property development sites, perhaps applying for an option on the site, and on-selling the ‘Development Grant Approval’ to someone who does have the time.