dick smith on why houses expensive, page-25

One thing I dont understand is people claiming there will be a 40% drop in house prices.

A house of 25 squares on a turn key price costs about $230k to build, or there abouts. This price in itself cant really drop, as I dont see there being any massive decrease in building materials.

So if a block of land in the Outer Western Suburbs of Sydney is worth approximatley $250k, and the house is worth $225k to build, then the total value is worth $475k.

This 40% price reduction is a furphy, because in order to do that then the land would have to go from $250k down to $60k. Harldy likely.

A house costs what it costs to build rememeber.