Answer Upon - When To Develop Property

Firstly, no one can consistently predict macro-economic cycles with any great accuracy. In fact, the prediction of macro-economic movement is becoming more and more complex in light of globalisation and the liberalisation of markets. If economists cannot predict macro-economic movements then how can ordinary property developers!

Secondly, it would be great if we all had an abundance of lazy cash sitting around so we could purchase development sites outright in the troughs and wait until the peaks to sell. In reality most property developers do not have an abundance of lazy cash sitting around and have to finance the purchase of a development site. To purchase a site in the trough and sell in the peak would therefore involve the payment of land holding costs (eg. rates, land tax) and finance costs (eg. interest, management fees) for the interim period which may last for many years.

Thirdly, it implies a direct relationship between the broader economic environment and the property market. Whilst on a broad level this may hold true, in reality the property market is made of many sub-markets which each behave differently and not all in line with broader economic movements. To simply talk about the property market is to overgeneralise as there are property markets within property markets (e.g. Australian property market - Queensland property market - South-East Queensland property market - Brisbane property market - Bayside property market - Manly property market). In other words, whilst the Australian property market at large may be in recession the Manly property market may be performing strongly.

Fourthly, the property development industry, like any other industry is driven by the forces of supply and demand. If there is increasing population growth, as is the case in most of the developed world, then there will be increasing demand for dwellings to accommodate the increasing population. This increase in population does not have any relationship with macro-economic movements. Therefore, imagine if developers only developed during the growth phase, where would the individuals demanding accommodation in the interim live?

So if the use of the economic cycle is no good indication of when to develop property, than what is? Well, any serious property developer will tell you that if the financial feasibility analysis and due diligence analysis on a project shows an adequate return for the risk involved than the project should be undertaken. This is not to say that broad macro-economic factors should be ignored but rather the financial feasibility analysis and due diligence analysis of a project should be the determining factors in deciding when to develop. And besides, a thorough financial feasibility analysis incorporates such macro-economic factors as interest rates and inflation and their effects on project returns.

Whilst there will still be those who advocate the use of the economic cycle for timing property development projects, in our experience we have tended to do just as well financially irrespective of which stage the economic cycle is at.

During the growth or ‘good' times suitable development sites are harder to find, are often overpriced by sellers, and often have to be purchased without local authority permits and without suitable contractual conditions. Local authorities are overworked and are slow to issue permits causing frustration and sometimes increased land holding and finance costs for developers. Building contractors are busy and their profit margin and the cost of materials increase. Sales will occur quickly and marketer's fees may decrease due to the higher turnover. Fear of an overheated real estate market by the financial regulators may initiate an interest rate rise in an attempt to dampen demand.

Thirdly, it implies a direct relationship between the broader economic environment and the property market. Whilst on a broad level this may hold true, in reality the property market is made of many sub-markets which each behave differently and not all in line with broader economic movements. To simply talk about the property market is to overgeneralise as there are property markets within property markets (e.g. Australian property market - Queensland property market - South-East Queensland property market - Brisbane property market - Bayside property market - Manly property market). In other words, whilst the Australian property market at large may be in recession the Manly property market may be performing strongly.

Fourthly, the property development industry, like any other industry is driven by the forces of supply and demand. If there is increasing population growth, as is the case in most of the developed world, then there will be increasing demand for dwellings to accommodate the increasing population. This increase in population does not have any relationship with macro-economic movements. Therefore, imagine if developers only developed during the growth phase, where would the individuals demanding accommodation in the interim live?

So if the use of the economic cycle is no good indication of when to develop property, than what is? Well, any serious property developer will tell you that if the financial feasibility analysis and due diligence analysis on a project shows an adequate return for the risk involved than the project should be undertaken. This is not to say that broad macro-economic factors should be ignored but rather the financial feasibility analysis and due diligence analysis of a project should be the determining factors in deciding when to develop. And besides, a thorough financial feasibility analysis incorporates such macro-economic factors as interest rates and inflation and their effects on project returns.

Whilst there will still be those who advocate the use of the economic cycle for timing property development projects, in our experience we have tended to do just as well financially irrespective of which stage the economic cycle is at.

During the growth or ‘good' times suitable development sites are harder to find, are often overpriced by sellers, and often have to be purchased without local authority permits and without suitable contractual conditions. Local authorities are overworked and are slow to issue permits causing frustration and sometimes increased land holding and finance costs for developers. Building contractors are busy and their profit margin and the cost of materials increase. Sales will occur quickly and marketer's fees may decrease due to the higher turnover. Fear of an overheated real estate market by the financial regulators may initiate an interest rate rise in an attempt to dampen demand.

Putting Some Away - How To Spend Less And Keep More
We are all victims of the paycheck blues. Every two weeks we check our pay stub, get our check in hand or check our bank account - then go shopping. By the end of the weekend, we are stocked up somewhat, but our bank is dry, and again - we hit the blues.One way to avoid the blues is to reduce or spend better when buying our groceries. Did you know that a family's groceries can be the largest expense outside of rent or a mortgage? On average, if you earn $700 a pay period, you'll spend a 3rd of that, almost $250 on groceries alone.So how to reduce and rein in your spending? By doing a few simple things regularly you can save yourself a rty markets (e.g. Australian property market - Queensland property market - South-East Queensland property market - Brisbane property market - Bayside property market - Manly property market). In other words, whilst the Australian property market at large may be in recession the Manly property market may be performing strongly.

Fourthly, the property development industry, like any other industry is driven by the forces of supply and demand. If there is increasing population growth, as is the case in most of the developed world, then there will be increasing demand for dwellings to accommodate the increasing population. This increase in population does not have any relationship with macro-economic movements. Therefore, imagine if developers only developed during the growth phase, where would the individuals demanding accommodation in the interim live?

So if the use of the economic cycle is no good indication of when to develop property, than what is? Well, any serious property developer will tell you that if the financial feasibility analysis and due diligence analysis on a project shows an adequate return for the risk involved than the project should be undertaken. This is not to say that broad macro-economic factors should be ignored but rather the financial feasibility analysis and due diligence analysis of a project should be the determining factors in deciding when to develop. And besides, a thorough financial feasibility analysis incorporates such macro-economic factors as interest rates and inflation and their effects on project returns.

Whilst there will still be those who advocate the use of the economic cycle for timing property development projects, in our experience we have tended to do just as well financially irrespective of which stage the economic cycle is at.

During the growth or ‘good' times suitable development sites are harder to find, are often overpriced by sellers, and often have to be purchased without local authority permits and without suitable contractual conditions. Local authorities are overworked and are slow to issue permits causing frustration and sometimes increased land holding and finance costs for developers. Building contractors are busy and their profit margin and the cost of materials increase. Sales will occur quickly and marketer's fees may decrease due to the higher turnover. Fear of an overheated real estate market by the financial regulators may initiate an interest rate rise in an attempt to dampen demand.

Customizing Unit Coins for Our Heroes
The first rule of thumb to remember when designing and producing a custom coin is that it is imperative that the customer and manufacturing work closely as a team throughout the entire process. This will assure the best possible product. A coin that the customer will be as proud to present as their staff is to receive.There are basically eight steps to creating a custom coin. They are:Customer/Manufacturers CommunicationsArt PreparationSelect Size/quantity of coins to be orderedSelect shape of coinSelect FinishSelecdation in the interim live?

So if the use of the economic cycle is no good indication of when to develop property, than what is? Well, any serious property developer will tell you that if the financial feasibility analysis and due diligence analysis on a project shows an adequate return for the risk involved than the project should be undertaken. This is not to say that broad macro-economic factors should be ignored but rather the financial feasibility analysis and due diligence analysis of a project should be the determining factors in deciding when to develop. And besides, a thorough financial feasibility analysis incorporates such macro-economic factors as interest rates and inflation and their effects on project returns.

Whilst there will still be those who advocate the use of the economic cycle for timing property development projects, in our experience we have tended to do just as well financially irrespective of which stage the economic cycle is at.

During the growth or ‘good' times suitable development sites are harder to find, are often overpriced by sellers, and often have to be purchased without local authority permits and without suitable contractual conditions. Local authorities are overworked and are slow to issue permits causing frustration and sometimes increased land holding and finance costs for developers. Building contractors are busy and their profit margin and the cost of materials increase. Sales will occur quickly and marketer's fees may decrease due to the higher turnover. Fear of an overheated real estate market by the financial regulators may initiate an interest rate rise in an attempt to dampen demand.

Video Streaming Designed To Promote Your Present Home Based Business
When you are attempting to promote your Home Based Business Opportunity you should look as far as the use of Digital Streaming as a way to promote your Home Based Business on the internet.I have been using this technique to help promote my personal traditional business, as well as my current Home Based Business, which has resulted in amazing results in exploding my Home Based Business, as well as my traditional business.Using this type of easy to use technology to create a Social or Business web based virtual world creates a totally effective marketing tool, without the need of any special software, downloads, or hardware, at very lowy development projects, in our experience we have tended to do just as well financially irrespective of which stage the economic cycle is at.

During the growth or ‘good' times suitable development sites are harder to find, are often overpriced by sellers, and often have to be purchased without local authority permits and without suitable contractual conditions. Local authorities are overworked and are slow to issue permits causing frustration and sometimes increased land holding and finance costs for developers. Building contractors are busy and their profit margin and the cost of materials increase. Sales will occur quickly and marketer's fees may decrease due to the higher turnover. Fear of an overheated real estate market by the financial regulators may initiate an interest rate rise in an attempt to dampen demand.

During the recession or ‘bad' times suitable development sites are easier to find, are often fairly priced by motivated sellers, and can often be purchased with local authority permits and on attractive contractual conditions. Local authorities are not as busy and are quicker to issue permits. Building contractors are not as busy and their profit margin and the cost of materials will generally stabilise or possibly decrease. Sales will occur more slowly and marketer's fees may increase due to the lower turnover. Interest rates are generally stable and may even fall in an attempt to stimulate demand.

Confused? Don't be. Just remember that serious property developers develop property in any market. If the financial feasibility analysis and due diligence analysis on a project shows an adequate return for the risk involved then the project should be undertaken.

By Luke Andersen
Partner of Positive Property Strategies and co-author of ‘Residential Real Estate Development: A Practical Guide For Beginners To Experts.'

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