Would it be over capitailising to knock down an existing home in Para Vista and rebuilding?

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It depends on several things. Location in Para Vista, price of house (if you're looking to buy for the sole purpose of bulldozing) and getting your resale market right. Currently, the market in Ingle Farm/Valley View/Para Hills/Para Vista is flat. There are houses going in some spots for as low as $220-240k. Sounds like a bargain, but the end result is also stale with finished houses that were once selling for $400k+ 2 years ago, now only selling for $370k ish.

You have to factor in your subdivision costs, demolishing, any engineering (this area can be deceiving in terms of 'flatness') and the true cost of a new home (landscaping, fencing, a/c, carpets etc). You may only end up with $50k for two homes, and that's before your CGT and any mortgage repayments.

The areas are not bad and all offer good, long term investments. It is a great time to buy, but you may wish to consider renting out the property while the market gets over this staleness in terms of selling. Rent in the area may turn out to be positive gearing, depending on your mortgage costs.

In terms of crime etc, the area is no worse off than any other and offers things which outweigh it such as transport, shops, schools etc. Having comments such as crime is growing exponentially in the North is vague and lumps the better part of 100,000 homes in one bunch, which is obviously not correct. I also recommend speaking with a good agent who has significant experience in the area in both rental outcomes and selling. They will give you an honest and frank opinion (ps, I am sooo not an agent!).

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Short answer - yes. This is not a nice area and crime is growing expedentially in the North.

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Hi Abslaan
I have a friend who lives in Para Vista and she likes the suburb. She says it is quiet, clean and green. If you are planning on living there long term, then the knocking down/rebuilding would be for your own enjoyment, and house value wouldn't matter much. If you are planning on doing it to make a quick buck, I would be very cautious in the current market.

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Rentals in Para Vista, SA 5093