The Recent History of Residential Property Development in Melbourne (Pre Corona Virus)
Residential property development in Melbourne can be a cutthroat business.
If done right, it can be a brilliant way to generate serious amounts of wealth. If done wrong, it is a fast-track to bankruptcy.
Not everyone has what it takes to be a residential property developer. But with hard work, lots of research and practice, it is possible to make it.
In this informative article, we’re going to focus on the recent history of the property market cycle and how it impacted property developers.
There’s been lots of change in the last ten or so years, and not everyone in the game has emerged unscathed.
Everyone Was All In
A little while ago (around 2010-2012), property developers were popping up left, right and centre. Many of them were making loads of cash.
The market was booming, and developers didn’t need to be as diligent as they are currently.
They could pay too much for a site, and it wasn’t a fatal move back then. Because of the rapid growth of the market, the increase in value would just absorb any mistakes.
Market growth pretty much absorbed every mistake everyone made.
This made the developers look like geniuses and serial entrepreneurs. The lion’s share of players during this period were the fly-by-nighters.
The dodgy operators looked to make a buck any way they could. There was no pride in the work. It was about making as much money, as quickly as possible.
And people living in the properties they built ten years later are now paying to fix the cut corners and dodgy builds.
Side note – already have a project and needs some help? Why not check out our development management services we offer.
When The Market Turned
The market began to turn at the end of 2017, many of these aforementioned fly-by-nighters were exposed. They were super greedy and capitalised on the market while the going was good.
When it wasn’t, the buyers all dissipated into thin air. Auctions around this time had tumbleweeds for bidders.
During this time, only the strong made it through. And they are once again coming out on top. A lot of deadwood was cut from the industry. And that’s good. Because it was getting out of control. All those dodgy, backyard developers started losing money as quickly as they had made it.
It was during this time that the team at Little Fish bunkered down and refined our internal systems and real estate development processes.
We knew we needed to be one of the elite, boutique property developers in Melbourne. Also, we knew if we didn’t hone our game, we would go under.
We refined our methods, we focused on our valuable clients and investors.
Here at Little Fish, we built our brand and practiced getting better at every facet of residential property development in Melbourne.
A the same time, we worked very closely with our network of industry suppliers and our internal staff to ensure the projects we were undertaking were delivered on time. And to the highest standards and with integrity. Also, they were delivered on budget.
Check out this case study we did on a project that was purchased at the top of the market and was sold at the bottom. Yet still ended up a successful and profitable project. And this one for further perspective.
We worked hard on the LIttle Fish brand to build trust within the industry.
Most importantly, we delivered for our clients and our investors.
As the dodgy operators were freaking out, running around like bears with sore heads, we saw an opportunity. We got better.
We decided as a team that we needed to be able to turn a profit in good and poor markets. So we set out to determine how to do just that.
In retrospect, it felt like a free fall. Silly amounts of money were being wiped off the bottom line of project after project, week after week.
A simple approach to this would be thinking that we lost as a business and personally (as we develop our own personal projects as well). Yet in hindsight for Little Fish, it was a huge blessing. As we mentioned, it separated the wheat from the chaff.
Those developers that gave buyers no confidence and the residential development market lost out. It was a bit like the wild west, except the cowboys lost.
The deadwood got cut out, and the cream rose to the top.
We emerged better and stronger than ever.
This is something that we at Little Fish take huge pride in.
We were able to navigate the worst property market for residential property development in Melbourne.
And not only that – we came out the other end guns blazing.
Why Tell This Story?
Now you need to understand, I’m not telling this story to brag or try to impress you, reader. There’s a method to the madness here.
I share this so you can understand that if you are going to attempt something, you need to do it properly.
You need to work honestly, and with integrity.
Any Tom, Dick or Harry can buy a lot of land and begin a subdivision process and call themselves a property developer.
This isn’t a bad idea, on the contrary. It’s a great opportunity to build your wealth.
But if you’re going to do it, don’t underestimate the value of aligning your project with a brand like Little Fish.
It may just give your future buyers the confidence they need to buy your homes.
Not to mention you’ll minimise your risk and give yourself the confidence to succeed.
Side note – not sure if you can subdivide your property? Click here.
In short, it was free for the taking for years as the residential property development Melbourne market boomed.
Then it turned, and only the cream of the crop survived. This was exactly what the industry needed.
The deadwood needed to be cut off as it was giving the industry a bad name and rep.
Little Fish came out better and stronger than we ever were.
Since then, we continued to work hard and challenge ourselves and the market.
We invested in our brand and our people and are now poised to help you generate some serious wealth.
If this sounds interesting or enticing. Check out our development consultants service or give us a call on 1300 799 277 we’d love to hear from you.