Kinda like Monopoly

I was out for a run over the weekend, and along the way noticed a board out the front of a house. Numbers 5 and 7 Alfrick Road, Croydon, have recently applied for council approval to demolish the two existing houses and build a three-storey apartment block. From memory, we’re looking at about 42 doors.

The local and state governments have earmarked the areas around Croydon central for high-density occupancy for several years now. Those familiar with the area will already know of the developments around Hewish Road, and the council has indicated that they are open to more of the same.

7 Alfrick Road sold in Janaury 2009 for $435,500, and 5 Alfrick Road sold in May for $480,000. Clearly, the land is now worth quite a lot more, particularly once those plans are approved shortly. Having control over both blocks would mean that number 5 there is worth more to the developer in question, hence why the sale price was a little over the odds compared to an almost identical block next door.

It’s kinda like Monopoly, really.

Now, the Croydon Town Centre Residential Development Policy, linked above, was issued in January 2006. Consider 2 Alfrick Road; sold in March 2006 for $327,000 – after the policy was released – and resold to a developer in September 2009 for $660,000. Not a bad increase in three years or so, but you’ve gotta feel sorry for the vendor who let it go so cheaply at the time.

Two key lessons in this, I think.

Firstly, it’s important to know what the local councils are planning and encouraging in a given area. And secondly, knowing the higher and better use for a given property can sometimes mean that you can find an opportunity that others may simply overlook.