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Developers now a risk to the entire system?

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  • Developers now a risk to the entire system?



    Something ain't right in the development sector.

    I see high density residential developments, in various states of completion, all around the main centers.

    Naturally, I see the developers perfecting their efficiency models.
    Getting more on a site, cutting corners and pushing rules to their limits.

    One small problem.
    They're running on a false model, slightly self deluded.

    And because they are now hugely overpaying for individual properties, in order to buy two or more adjacent properties...
    they have put themselves, and the entire system, in a precarious position.

    Normally, the last fool theory only wipes out small end speculators.

    But now, big players will be the last fools.

    And that's going to hit the system hard.

    A warning, (that will be ignored like all others), stop that problem now, while you still can.
    I'm looking at you City Councils and Lenders.
    (No use talking to the companies, they're on a high).


    * From the diagram, the developers once were answer 3, but now they've become answer 4.
    Last edited by McDuck; 13-03-2021, 09:24 AM.

  • #2
    creating bigger lots means greater occupancy and lower prices with overall reduction in land cost per unit. How can this not be a good thing?

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    • #3
      Originally posted by John the builder View Post
      creating bigger lots means greater occupancy and lower prices with overall reduction in land cost per unit. How can this not be a good thing?


      Seems to make perfect sense when you just look at that microscopic part of the picture.
      Once you take a step back, you see all sorts of issues.

      Have you ever heard the saying, " Don't put all your eggs in one basket"?
      Last edited by McDuck; 13-03-2021, 04:58 PM.

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      • #4
        what about "horses for courses" and "cut your cloth...."

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        • #5
          Originally posted by John the builder View Post
          what about "horses for courses" and "cut your cloth...."
          Ha, you may be off on a tangent.
          I was really talking about systemic risk.

          I really like the idea of optimizing land use.
          But it's a fallacy to think that, "if a little is good then a lot is better".
          (How many drivers licenses have been lost on that theory)..

          Est modus in rebus

          But, on your tangent then,

          As long as "horses for courses" isn't code for " All animals are equal, some are just more equal than others",
          I'm inclined to agree with you.

          Comment


          • #6
            If prices of larger pieces of land go up 50-10%, what makes you think that cramming more units on say 1000 sqm makes the per unit price any cheaper. Sure less than the original lot, but a two year delay until completion means holding costs, development costs and markups all combine to make what you get for your money much less. At some point minimal standards and protections are compromised.Sure a buyer gets a house but after some years it won't be worth much. Sure the town planners show well dressed people strolling around boulevards and getting public transport to their central city work. Maybe true for the viaduct - not for most. Closer to ghettos for most.

            Comment


            • #7
              Originally posted by chris_gee View Post
              If prices of larger pieces of land go up 50-10%, what makes you think that cramming more units on say 1000 sqm makes the per unit price any cheaper. Sure less than the original lot, but a two year delay until completion means holding costs, development costs and markups all combine to make what you get for your money much less. At some point minimal standards and protections are compromised.Sure a buyer gets a house but after some years it won't be worth much. Sure the town planners show well dressed people strolling around boulevards and getting public transport to their central city work. Maybe true for the viaduct - not for most. Closer to ghettos for most.


              Yup.
              John the builder knows this.
              I'm possibly putting him as number 2 in the diagram.‚Äč
              Well really number 4, but he's not figured it out yet.

              If you really get on the ground and go visit these locations, talk to the people, and extrapolate the end results, You see some of it has gone way outside brief.
              Last edited by McDuck; 15-03-2021, 07:20 AM.

              Comment


              • #8
                Originally posted by McDuck View Post


                Something ain't right in the development sector.

                I see high density residential developments, in various states of completion, all around the main centers.

                Naturally, I see the developers perfecting their efficiency models.
                Getting more on a site, cutting corners and pushing rules to their limits.

                One small problem.
                They're running on a false model, slightly self deluded.

                And because they are now hugely overpaying for individual properties, in order to buy two or more adjacent properties...
                they have put themselves, and the entire system, in a precarious position.

                Normally, the last fool theory only wipes out small end speculators.

                But now, big players will be the last fools.

                And that's going to hit the system hard.

                A warning, (that will be ignored like all others), stop that problem now, while you still can.
                I'm looking at you City Councils and Lenders.
                (No use talking to the companies, they're on a high).


                * From the diagram, the developers once were answer 3, but now they've become answer 4.
                Number 4 is the biggest fool for me.

                Comment


                • #9
                  Originally posted by McDuck View Post


                  Something ain't right in the development sector.

                  I see high density residential developments, in various states of completion, all around the main centers.

                  Naturally, I see the developers perfecting their efficiency models.
                  Getting more on a site, cutting corners and pushing rules to their limits.

                  One small problem.
                  They're running on a false model, slightly self deluded.

                  And because they are now hugely overpaying for individual properties, in order to buy two or more adjacent properties...
                  they have put themselves, and the entire system, in a precarious position.

                  Normally, the last fool theory only wipes out small end speculators.

                  But now, big players will be the last fools.

                  And that's going to hit the system hard.

                  A warning, (that will be ignored like all others), stop that problem now, while you still can.
                  I'm looking at you City Councils and Lenders.
                  (No use talking to the companies, they're on a high).


                  * From the diagram, the developers once were answer 3, but now they've become answer 4.
                  Supply/demand.
                  "DEBT BECOMES IRRELEVANT WITH INFLATION".

                  Comment


                  • #10
                    Originally posted by Frezzinghot View Post

                    Supply/demand.
                    ?

                    The supply of what and the demand for what?

                    Affordable credit?

                    A job that pays enough to afford the interest on the credit?

                    A country that will accept immigrants with " essential" skills?

                    A docile population that will allow itself to be reamed?



                    Last edited by McDuck; 21-03-2021, 06:38 AM.

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