HOW MELBOURNE LAND OWNERS CAN STILL ACHIEVE 2017 PEAK VALUES

Posted by Khurram Saeed on Apr 16, 2019 12:10:47 PM

Melbourne landowners looking to sell their broadacre land can still realise peak value if they choose to proceed with a Land Development Agreement (LDA) with Resi Ventures.

With the broadacre land market falling below the 2017 peak, and set to fall further in 2019, the current market is perfect for the LDA development option as it removes risk and offers significant upside.

LDAs work through market cycles and provide regular payments for Landowners as the land is sold and settled in stages and the Landowners don't need to wait until the end of the project to realise their profits.

LANDOWNER SECURITY

The security for the landowner is that Resi Ventures not only underwrites the value of the land, with a floor price for every lot sold, but Resi Venture’s shares the upside as the market recovers.

Resi Ventures is currently developing more than $600 million of projects in Melbourne with a 3000 lot pipeline and are the busiest they have ever been undertaking due diligence on several sites across Melbourne’s growth corridors and are looking for more sites.

MARKET RED FLAG!

If you are a Landowner with a terms sales contract and the purchaser is asking for extensions on settlement, or is unable to make instalment payments, this is a major red flag that the purchaser is unable to fund the acquisition.

If this is the case it is time to move on to a fully funded, financially stable model, such as a Resi Ventures LDA, to realise the maximum value for your land.

An LDA preserves the value of a site outside of market cycles as it is priced on future value.

YOU SHARE THE MARKET UPSIDE

With most new developments in PSP approved areas taking 1-2 years to launch this provides time for all prelaunch planning to occur with the opportunity to sell into the next market upturn Resi Ventures forecast to commence in 2020/2021.

GENERATE MORE LOTS AND HIGHER PRICES

An LDA is a form of development partnership agreement where the land owner uses their land as equity and Resi Ventures pays all development costs through to the final sales. It is a flexible structure that requires no cash input from the land owner as is fully funded by Resi Ventures.

In many instances the detailed LDA process approach adopted by Resi Ventures can lead to substantially greater lot yields, further boosting the underlying value of the Landowner’s holding from as little as 10 hectares.

Topics: Land Development Agreements

Resi Ventures

Land Development Agreement

This blog will provide you with up to date information on the Resi Ventures LDA process and the latest on Melbourne's residential property market land deals.

  • Why you should consider an LDA
  • How an LDA can lead to a higher price for your land
  • Tax effective LDA contracts
  • Your added security with our LDA process

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