One of the things we talk to our clients about, which you really cannot look away from, is that you have to meet the market. If you’re in an area and the median price is $500,000 and you want to build apartments, townhouses or homes that are averaging $1m, then straight away you are making your project harder than it needs to be.
It all comes down to researching. Just because you think that’s the right things to do for your project, it’s not always the case.
The flow on effect from that on a project is not just at day 1, it never leaves you. It’ll be too expensive to build, your land won’t value up what you think it’ll be and the valuation will come unstuck. It’ll be hard to get it sold because you’ve got people looking at an area who are looking to spend x amount of money because they’re looking to pay the medium price, and you’re well above it.
At the back end when you go to settle, you’ll have valuation problems so it’s about being smart with what you do and it’s certainly about knowing what you can and can’t do in a particular area that will meet the market because even if you think you’re the smartest operator in town, you’re never going to be smarter than the market. Do as best you can within the market, but don’t try to be a market pioneer.
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Contact Keiran Foster
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