Chermside, Brisbane North

[MTo]

Auction result this month in Chermside (source: www.domain.com.au)

Address Date Type Agency Result Price

62 Latham St Nov-07 house 3 0 RW Chermside Auction - Sold $738,000

481&483 Hamilton Rd Nov-07 other residential 0 0 RE/MAX IntegrityClayfield Auction - Sold $1,130,000

Those properties are run-down houses with a third of an acre to half of an acre blocks and worth less than 150k 10 years ago. The super surge in value is due to local government rezoning of the area in 2002, making them eligible for units and townhouses development.

With the local government planning to improve Chermside centre further (link below), I wonder if anyone has thought of buying run-down houses around the area to benefit from future government rezoning? It gives you two options of developing units/townhouses yourself or sell off the block, both is sure to give you huge profits.

http://www.brisbane.qld.gov.au/BCC:BASE:pc=PC_2737

 

[MTo]

Also, Chermside has everything a suburb wished for, the largest shopping centre in Queensland (Westfield shopping complex, just recently refurbished), bus routes (to surrounding suburbs and Brisbane CBD), great schools and wonderful parks.

For more info, do your own research of the area...

 

[stumunro]

So you are typically banking on zoning changing from resA to resB correct?

 

[urban cowboy]

to a large extent you are too late...the developers have been working hard in their for the last two years - that is why Latham street sold so high...the prices are being pushed up for the dev potential an its dragging the rest up slowly.

that latham street site is way over priced - but then again it just shows how things go when developers get into it!!

if you are careful, you can still do well, but you wont find the good deals on the net...most agents can sell good stock by the 5th phone call
- i do it regularly

cheers
UC

 

[MTo]

So you are typically banking on zoning changing from resA to resB correct?

Yes, correct.

 

[MTo]

to a large extent you are too late...the developers have been working hard in their for the last two years - that is why Latham street sold so high...the prices are being pushed up for the dev potential an its dragging the rest up slowly.

that latham street site is way over priced - but then again it just shows how things go when developers get into it!!

if you are careful, you can still do well, but you wont find the good deals on the net...most agents can sell good stock by the 5th phone call
- i do it regularly

cheers
UC

Which real estate agency are you working for? Can you share more of your opinions on Chermside in investment point of view?

 

[urban cowboy]

I work for Harcourts Bertie Group and am a development specialist.

I have sold or been involved in the sale of dozens of properties in chermside over the last couple of years. My particular focus up until recently has been development sites (or those with potential for Dev.) and brand new units and townhouses. I now do a lot of res stuff in the North west suburbs but still have my fingers well and truly on the pulse so to speak....enough about me, to answer the second part of your question.

This time last year, sites across the Chermside CBD were selling at around 100k per footprint for developable sites (LMR) and slightly higher for MR.

That figure has now increased to as much as 140k-150k thanks to some cashed up builders from the southern states and the locals being desperate to compete with them.

Prices for the finished product have also sky-rocketed by over 100k per townhouse in less than 12 months. this time last year I would do a back flip if i could get over 375k for a brand new 3bed standard finish townhouse. I would now be suicidal if i got less than 475k for the same thing.

sorry to be dramatic, but do an RE.com search on chermside an have a look at the prices of townhouses - very few new ones for under 450k (usually small or in poor positions) and most are 470+ for the same standard.

Further - there are at least 50 developers that i know are operating in the area either actively building or land banking...(prob closer to 80 as i rang most of them two weeks ago). They are all aware of a rezone coming to certain parts of the suburb that MAY allow them to go as high as 10 stories. This is all local knowledge stuff that most folks will never know until its too late. MAny of these guys bought up over the last couple of years and some are starting to onsell them and bank the gains due to the price rises being seen in preparation for the rezone.

I do not know you or your experience, but my suggestion would be that if you are relative novice compared to the local developers - be very very careful...the developers really know their stuff in there and there are a couple of REA's that are well known locally for eating interstate investors alive by employing certain tactics.

can you do well in there??? ABSOLUTELY - but only if you really know what you are doing...unfortunately the domain.com and RE.com etc type sites only tell you what the agent is advertising in the press. Most local agents will have rung 50-100 local developers and builders long before a site like Latham street hits the net and papers. That particular site has nearly tripled in price in the three sales since 2003 - and any agent worth their salt will know it.

To clarify - Latham street is obviously not overpriced as somebody paid that for it - however it shows an interesting trend in dev sites as it is a poorer site compared with some other 809's nearby that have better zoning, GFA capability and location. there have been a few other sales this year of similar sites, same size and zoning and some in better spots that have failed to hit 700k. examples in Kingsmill Street, RAiney street and Norman Drive - all nearby and arguably better spots for different reasons

ALSO, do a search on chermside within the forums - a number of us have canvassed all this in a number of threads earlier in the year and you may get some other interesting info from there.

just my 2c...i expect some here to disagree with me, but that's there right.

good luck with it!!
cheers
UC

 

[MTo]

Thanks for the information UC. It was of great help cause I am a still novice as you have thought. Just started my research on the area last month and have no idea of the locals at all as I have not been there yet.

Apart from development opportunity in the area, what about buying houses in surrounding suburbs such as Stafford Heights, Chermside West, Aspley, Geebung and Zillmere? We can get a house with around 600 sq. m of land for late 300k to mid 400k in those suburbs. You mentioned earlier that new townhouses sell for around 450-470k in Chermside, don't you think these houses have great potential for capital gains? Look around capital cities and you will hardly find houses that priced lower than townhouses.

Love to hear more from you, UC.

 

[MTo]

Btw, I could not find the threads about Chermside in the forums. Could help me locate them, please? or never mind if they had been deleted.

Thanks.

 

[urban cowboy]

Hey MTo

here is a couple I found quickly...

will post more if able - they are not chermside specific, but do mention it in passing quite a bit.

http://www.somersoft.com/forums/showthread.php?p=292529#post292529
http://www.somersoft.com/forums/showthread.php?p=287704#post287704

feel free to ask anything - i'll try to give you a decent answer

cheers
UC

 

[urban cowboy]

Apart from development opportunity in the area, what about buying houses in surrounding suburbs such as Stafford Heights, Chermside West, Aspley, Geebung and Zillmere? We can get a house with around 600 sq. m of land for late 300k to mid 400k in those suburbs. You mentioned earlier that new townhouses sell for around 450-470k in Chermside, don't you think these houses have great potential for capital gains? Look around capital cities and you will hardly find houses that priced lower than townhouses.

no simple answer to those questions. you can do very very well in all those areas, but again you need to do plenty of homework - geographically you have covered an enormous area and there are parts of all you wouldn't touch etc and there are good parts as well. Each suburb has areas zoned for higher density development (units/townhouses) and all have blocks ripe for splitting and renovation etc...

My take on pricing is that for whatever reason, there is a massive demand for townhouses in Nth Brisbane right now - we are seeing the same price rises in Nundah and surrounds as well with t/houses well into the 500k's. I dont understand why but acknowledge that it is obviously part of the greater price growth being experienced right across town this past year...and for some reason this lifestyle is appealing to a group of folks that haven't previously raised there hand to be counted like this.

do the houses you mentioned have the potential for capital gains - you betcha!! but again do PLENTY of homework because i don't have a crystal ball and some areas will grow more than others. The only thing i am certain of is that properties with a higher zoning will continue to fetch a lot more than standard res A stock.

If i read the current climate right - and that's a big if - i believe that any good purchase close to the new outer-CBD's at Chermside, Indooroopilly, Mt Gravatt and Carindale will perform very well over time and be well worth the investment longer term.

hope this helps - again it is only opinion - please do your homework.

cheers
UC

 

[Guan]

Hard to find 3x1x1 houses in decent condition and price below 400k in there now. Market is very tight.

 

[cougar_01]

Keppera development

Urban Cowboy
Thanks for the insight into chermside.
Do you have any feelings towards the Keppera Shopping Complex development and how its affecting prices in that area.
I haven't lived in Brisbane for 2 years and have lost the feeling for the market in the north/north west area, being a REagent I guess you guys all talk about your areas just want to know about zonings and developments etc affect that corridor.

 

[grubar30]

Ahhhh, Chermy, Nundah and Zillmere, the holy tri-fecta of Brisbane Northern suburbs who in recent years have benefited from changes to City Council Town Planning codes....and this was the exact time when "we" should have gotten in....not now when the boat has well and truly set sail.........the real developers have come and gone and made the easy money....that's a fact!....they made their money when the margins were better (they always are at the beginning), while investors like me and you had no idea at the massive potential....but then again, we don't have the luxury of dining and hob-knobbing with Brisbane City Council Town Planners....

However, as Urban Cowboy said, money can still be made, but its much harder and requires extensive research and some real good connections...its all about who you know at this level, which kind of sucks....my advice - just keep working it...work the phones....seek the more honest RE agents and tell them your in the market for development sites....keep on them...hell, tell them how much you value loyalty and if they let you have first dibs, then you'll repay them by letting them sell the finished product (as opposed to running to the Investors club)...trust me, they'll love hearing that......here's the big one ---> get to know some local developers too...if one is willing to give you time of day, then you might get some good insight into what being a developer in the area is all about, and being a developer in general.....this is the best advice I can give you actually!

so good luck..

BTW, my friend just signed the paperwork (not but 3 days ago) on a 650m2, cavity brick, 4 bedder just 3 minutes walk from Chermside Shopping centre....sale price was well over $500k....prices have just been really crazy over the last 8 months here (who would have ever thought given the last boom is only 4 years old)....but when you put it into context of the future potential of Brisbane (esp. Chermy), well it doesn't look so bad in terms of pure Capital growth...it was zoned Res A, but sits 250-300 meters from the main transport hub that's going on Hamilton Road....so good chance of re-zoing in next few years...and if that happens, she's hit pay-dirt!

If Chermy gets too hot for you, try looking into the suburb of Rochdale ---> in my opinion, the last great untouched pocket of rural/farming land next to a major city in Australia....it just had its Town Plan released 2-3 months ago....its a 20 yr plan and the vision by the Council is pretty impressive....then again, if you can find any land that developers like Nev Pask haven't snapped up, then let me know too...

 

[Guan]

It is not too late for Chermside. Council's plan for the development of the area is on the way.

Rochedale is still sour. Give it 1-2 years.