Status: Building Application Stage
Timeline: August 2015 – April 2016
Duration: 10 Months (Based on Timeline)
Project Owners: IC4 Developments
Total Project Value at Completion: $160,00 – $170,00
Project ROI: Minimum 29.4%
Modular build dual key with car accommodation.
Construction: $137,00 – $147,00
Int and Fees: $4,000
Total Development Cost: $170,000
Challenges and Solutions:
Russell Island in particular has a negative aspect to its history amongst the locals having had properties sold below the mean high water mark many years ago. Essentially the land was sold to unsuspecting Mexicans at low tide and quickly shipped out (pardon the pun) before the turn of the tide.
This created a huge issue for Council who in their ability to approve the original subdivision did no realise the error. The solution? The Council swapped land with the purchasers on other areas of the Island and prosecuted developers and agents for the error of their ways. This stigma has stayed with Russell Island for 45 years. The Locals remember this and those on the main land would suggest that you are crazy if you buy on the Island.
With the Developer in a position of knowing that we all travel Back to the Future at some point of life he chose to get into the Delorian and look at his past. Having purchased a boat access property 15 years ago an hour North of Sydney, the developer noted a definite change to demographic. Actually two changes of demographic that made a large numeric change to the value of is property back then within the space of 5 years.
The first change was when the Developer bought their first Principle Place of Residence in a holiday destination area that had a 70% holiday home versus 30% full time residents. The Developers were the first “young” couple to buy in the area for 30 years. Quickly followed by another 4 couples in the following 3 months. 3 years later the holiday homes became 30% of the housing and 70% became full-time. Complete role reversal. The local school survived which had become the smallest school by student base in NSW.
Why did this happen? Median house price in Sydney at the time was $450,000 and these properties could be purchased for less than $250,000. 2 Years after the role reversal and the second demographic change was the influx of Yuppie sell outs in Sydney, that bought into the area after selling off their Sydney homes, paying off debt, buying in the area and having excess money in the bank.
Lessons Learned & Investor Comments:
There is a necessity to find funding options on modular as there are very few. The Australian dollar is not working in favour of Chinese modular as they use the American dollar.