BIG Brisbane Meeting / January 29th / David Hyne

[BIG]

Better Investing Group
Meeting 29th January, 2008

Guest Speaker
David Hyne

​

Hello everyone!

This month, David Hyne from Herron Todd White will be talking about the Brisbane property market - Past, Present and Future..

David Hyne is a Director of Herron Todd White (HTW) and Manager of their Ipswich/Brisbane office. A qualified valuer he has been with HTW since 1998 and prior to that at the Department of Natural Resources where he valued residential, commercial and rural property for state government asset purposes.

Herron Todd White is the largest independent property valuation and advisory group in Australia. Their objective is to provide the highest level of client service with integrity, professionalism and independence. They provide a comprehensive range of valuation, research and advisory services which are used by financial institutions, solicitors, accountants, property developers and corporations.

See: www.htw.com.au

Check out the BIG web site at www.big.org.au. You can find out more details of our meeting there.

When: Tuesday 29th January 2008.
Where: The Construction Training Centre, 460-492 Beaudesert Rd, Salisbury.
(For southbound traffic be sure to take the service road.)
Ian Barclay Building (Conference Room 2.2 - Rear door)
Time: 7:30 sharp!
Cost: $15/singles or $25/couples.

Everyone interested in property or the forum is welcome to come along. Having an IP is not a pre-requisite, only a motivation to do so. See you there!

Craig

 

[Perp]

Thanks, Craig. I plan to really try and make it this time Do many Somersofters go to the BIG meetings?

 

[craig]

Hi Ozprep,

Yes, a couple still attend. The group was originally created exclusively by somersoft forumites.

Craig.

 

[Ol School Skata]

I'll be in attendance tonight - my first one

OSS

 

[Brenda Irwin]

I'll be in attendance tonight - my first one

OSS

Were you there? I looked for you but there were about 46 of us so maybe I missed you? If you weren't there, you missed a really good night.

 

[kissfan]

Anyone care to share the main points/highlights of the night?

Regards
Marty

 

[Brenda Irwin]

He thought there could easily be an oversupply of vacant land blocks coming up outside of Brisbane. Laidley was mentioned as a possibility but Lowood will be just as oversupplied.
There could be a silver lining there, as developers selling house and land packages will become much more competitive and new houses may be available cheaper. Not so good for those who have just bought as valuations may also drop.

First home buyers inner city will have to settle for units as houses are just too expensive at present. Unfortunely, the FHB's have very high standards and may buy houses which they really cannot afford to hold, and there is growing evidence of this.

Areas along Brisbane River which have not previously have good growth due to lack of decent access to the river are being developed now with nice parklands so they are gaining popularity now.

Anywhere with good public transport access was flagged as desirable to tenants.

Growing unemployment figures was to be kept an eye on moreso even than interest rates. If tenants have no income, you don't get any rent.

With the stockmarket dropping, prestige properties were a possiblity of getting cheaper as owners try to get money to cover margin calls.

We had the usual growth graphs with Redlands showing a drop in there somewhere. He said some data was distorted and needed to be fixed.

 

[Perp]

Great summary, Brenda!

Areas along Brisbane River which have not previously have good growth due to lack of decent access to the river are being developed now with nice parklands so they are gaining popularity now.

Just thought I'd highlight that he particularly mentioned Tennyson, Sherwood, Yeronga, Yeerongpilly area.

Another area he mentioned was the vast tracts of land "east of Ipswich" where there is a lot of room for new development, meaning that it will take a long time to achieve strong capital growth. Even though conditions aren't ideal, many developers have been holding large pieces of land in the area and were being forced to get some of it generating cash. I believe he was referring to the area around Redbank and across the other side of Springfield. Look at a map and think south of the Logan Motorway, between the Cunningham and Mt Lindesay Highways - HUGE areas undeveloped.

And the big picture, take-home message that I got was that the fundamentals for SE QLD are still sound - good population, strong economy, low unemployment, infrastructure investment etc - but the unexpectedly high growth in 2007, anticipated prolonged high interest rates, and prices being historically high (eg relative to wages and other factors), all suggest that significant correction is necessary.

He's not predicting massive drops in prices, but does believe that prices really need to drop in real terms by about 25% - this is more likely to be via prolonged low capital growth than via a significant sudden drop in prices. For example, in the 90s capital growth averaged only 1.5% pa. Economic conditions right now are very similar to conditions immediately preceding the last 3 "crashes", which I think were 73/4, 84/5, and 93/4 (approx those years, anyway).

David also highlighted that these are trends for the overall market - there will of course be pockets that continue to perform well, and the challenge will be to find them.

He also highlighted that the mania surrounding high yield regional areas will come to an end. Because some investors have become so hot on the high yields, prices have been pushed up to unsustainably high levels.

He also recommended the economic analysis of Rod Cornish from Macquarie Bank, who David says is very rarely wrong.

 

[LynnH]

Thanks Brenda and ozperp for an excellent summary of David Hyne's presentation!! I couldn't make it to the BIG meeting last night, so am most grateful that you've both taken the time to 'put pen to paper', so to speak. Again, many thanks!

Cheers
LynnH

 

[kissfan]

Thanks Brenda and ozperp for an excellent summary of David Hyne's presentation!!

Ditto.

Thank you for your 'reports'

Regards
Marty

 

[Ol School Skata]

Were you there? I looked for you but there were about 46 of us so maybe I missed you? If you weren't there, you missed a really good night.

Yes i did attend. Did see you there at the back afterwards but you were busy talking with others i didn't want to interrupt and I had to leave fairly early afterwards.

Promise I will pull you aside at the next one.

OSS

 

[Andrew_A]

Sand castles

Interesting article about Mermaid Beach in todays Courier Mail (Sun 3/2/08), anecdotal reports are that the stock market wobble is affecting demand for the luxury property in that suburb, One of the castle builders on Hedges Avenue Tony Smith appeared to have wonderfully lucky timing by selling out of MFS last year but obviously not everyone was that fortunate.

I'm still clinging like a rat to a sinking ship about my interest rate holding/cutting scenario, that's dependant on there being some more pain to come with the whole hide the debt game, we haven't heard a peep from the Japanese yet. Still if I'm wrong I will have to do a rapid about turn, jump off the ship and fix because the other scenario is that inflation is on the way thanks to all the bits of paper the Chinese have to send our way.

I would like to have enough money to be able to pick up a distressed luxury property when the time comes, I remember the bargains that were around on the Gold Coast during the last property bust.