Thanks @Wuey72, that was our first option but was talked out of it by friends in the local real estate business. We could build the $1m home here but not add that in value to our place. We could buy at auction in the other suburb and that same house built on that block surrounded by equally upmarket homes would go up by the build price plus quite a few $100k on top of it.
Its a tricky call to make because the real-estate market is at a inflection point and even more so at the upper end and so too is A2 but for different reasons. The same real estate friend says that upmarket suburb is less likely to be affected by whatever downturn because most of the purchasers are wealthy and not in need of finance but I am old enough to remember the last property downturn and I dont remember any sector of the housing market that did not suffer in the ensuing correction at the time.
Well I am going to go to the auction but figured to leave me a margin of safety I am going to use the price set by a another knock down rebuild home sold a few months ago in the same street and take a few $100k off and factor that into buy and rebuild price. Our A2 holding is big enough to outbid anyone going tomorrow but just like shares everything has a fair price and I dont wont be the chump that overpaid at the top of the market.
A2M Price at posting:
$9.71 Sentiment: Buy Disclosure: Held
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