Does Brisbane still stack up?

Time on market 7th June 2015:
 

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Does it affects the newly build apartment vacancy rate in Newstead (Laguna) and also South Brisbane (Ivy) ?

I'm tempted to buy OTP with my superfund (SMSF) in one of those area.

It seems like you're intent on finding any excuse you can to convince yourself that OTP is the way to go? I would just buy, I think you've made up your mind:)
 
It seems like you're intent on finding any excuse you can to convince yourself that OTP is the way to go? I would just buy, I think you've made up your mind:)

Many of my friends now own an OTP in Brisbane in various places. Not sure why or how the agent tricks them to buy those OTP.

But yes, at least based on this forum experts. it is already over supply in the Brisbane CBD and also anywhere within 5KM of the area.

I guess they should've been better just go with the House & Land Package OTP.
 
Unless it's a "single price" contract where you put down 10% now and pay the balance on completion, house & land isn't OTP.

There is a clear distinction to how the finance is done. Traditionally, you get two contracts ; one for the land and one for the build. The land contract is valued along with the build contract - NOW, and then a loan is approved - NOW - not in 6, 12, 18 or 24 months when the property is completed, which is the case with OTP.

Then the land settles (meaning part of the loan is drawn down) and the construction commences, with the balance of the loan being drawn down in 5 or 6 progress payments . slab, frame, roof, fit out, lock up etc .

As construction progresses, the builder invoices either the client or the bank directly, for payment of each stage of the build. Depending on the lender, a valuation may be done at each stage, to verify the work has been completed as per the build contract specifications, before the payment is released. Not all banks do this though. Some simply ask the buyer ( you or I) to sign the payment authorisation for each stage/progress payment to be released. I personally prefer the slightly more expensive model where a valuation ( which must be paid for - usually @ $100-150 per stage) confirms the works are completed to specification, before the payment is released. Money extremely well spent in my view - to ensure your construction is to plan.

Either way, quite different to OTP where you do not secure unconditional finance up front and do not have progress checks/valuations done along the way.

More broadly, on the subject of Brisbane - in spite of ultra low rates , in spite of all the hyperbole surrounding it on forums like this, and in spite of just about every project marketer in the land talking it up to their investor clubs and what not, hasn't moved much in 18-24 months. At all costs - avoid anything in the CBD or around the CBD. ie Bowen Hills, Fortitude Valley. At all costs , avoid anything OTP in the high rise towers under construction there. Brisbane has as much supply coming online in those areas as Melbourne has had in their CBD, and they have half the population to absorb it. Yields in those areas will plummet in the next 1-2 years due to chronic oversupply. So if you are investing in Brisbane, be at least 3-4KM outside the CBD and be in medium density or low density only. Yields there are robust and will remain robust , and good proximity to the CBD is retained.

Look to areas such as Windsor, Zillmere, Mt Gravatt, Wynnum, Alderley, Sherwood, Cannon Hill etc
 
Land Appreciates, Building Depreciates

Unless it's a "single price" contract where you put down 10% now and pay the balance on completion, house & land isn't OTP.

There is a clear distinction to how the finance is done. Traditionally, you get two contracts ; one for the land and one for the build. The land contract is valued along with the build contract - NOW, and then a loan is approved - NOW - not in 6, 12, 18 or 24 months when the property is completed, which is the case with OTP.

Then the land settles (meaning part of the loan is drawn down) and the construction commences, with the balance of the loan being drawn down in 5 or 6 progress payments . slab, frame, roof, fit out, lock up etc .

As construction progresses, the builder invoices either the client or the bank directly, for payment of each stage of the build. Depending on the lender, a valuation may be done at each stage, to verify the work has been completed as per the build contract specifications, before the payment is released. Not all banks do this though. Some simply ask the buyer ( you or I) to sign the payment authorization for each stage/progress payment to be released. I personally prefer the slightly more expensive model where a valuation ( which must be paid for - usually @ $100-150 per stage) confirms the works are completed to specification, before the payment is released. Money extremely well spent in my view - to ensure your construction is to plan.

Either way, quite different to OTP where you do not secure unconditional finance up front and do not have progress checks/valuations done along the way.

More broadly, on the subject of Brisbane - in spite of ultra low rates , in spite of all the hyperbole surrounding it on forums like this, and in spite of just about every project marketer in the land talking it up to their investor clubs and what not, hasn't moved much in 18-24 months. At all costs - avoid anything in the CBD or around the CBD. ie Bowen Hills, Fortitude Valley. At all costs , avoid anything OTP in the high-rise towers under construction there. Brisbane has as much supply coming online in those areas as Melbourne has had in their CBD, and they have half the population to absorb it. Yields in those areas will plummet in the next 1-2 years due to chronic oversupply. So if you are investing in Brisbane, be at least 3-4KM outside the CBD and be in medium density or low density only. Yields there are robust and will remain robust , and good proximity to the CBD is retained.

Look to areas such as Windsor, Zillmere, Mt Gravatt, Wynnum, Alderley, Sherwood, Cannon Hill etc

Cool, many thanks Euro for the suggestion.
I've been briefed by the R/E agent in a few occasions in a Property investment seminar and they always promoting Newstead and South Brisbane apartment OTP due to the area is undergoing gentrification.

and thanks to some of the experts posting here which advised me not to buy Highrise OTP, I'll look for some other area maybe like in Park Ridge QLD 4125 for a House with land size larger than 260 sq M with minimum 3 bedroom.

Since my understanding is that building depreciates while land appreciates, is that correct that picking a house will always be a good chance for Capital Gain profit later on down the track let say next 5-10 years ?
 
and thanks to some of the experts posting here which advised me not to buy Highrise OTP, I'll look for some other area maybe like in Park Ridge QLD 4125 for a House with land size larger than 260 sq M with minimum 3 bedroom.

Since my understanding is that building depreciates while land appreciates, is that correct that picking a house will always be a good chance for Capital Gain profit later on down the track let say next 5-10 years ?

Didn't we suggest against Park Ridge last week? Like Yarrabilba, it is on a road to the outback. Have you seen a satellite photo of this area?

Do you really want to wait 5-10 years for Capital Gain? Other locations will probably get CG straight away.
 
Cool, many thanks Euro for the suggestion.
I've been briefed by the R/E agent in a few occasions in a Property investment seminar and they always promoting Newstead and South Brisbane apartment OTP due to the area is undergoing gentrification.

and thanks to some of the experts posting here which advised me not to buy Highrise OTP, I'll look for some other area maybe like in Park Ridge QLD 4125 for a House with land size larger than 260 sq M with minimum 3 bedroom.

Since my understanding is that building depreciates while land appreciates, is that correct that picking a house will always be a good chance for Capital Gain profit later on down the track let say next 5-10 years ?

John Henry . You've been asking about OTP places for around a month or more . My recollection is that most people on the forum who have responded to you have suggested alternatives .

Doesn't that say something ?

We don't gain anything by getting you to buy certain properties , but the agents you are talking to have a signiificant potential gain if they do get you too buy certain properties . They don't have those jobs because they are bad at them . They're salesmen . A good sales man can convince most people in the community to buy what they're selling .

Most people in the forum are here because they're not like most people in the community . They want or are prepared to give independent advice .
Because there isn't one way to do things , you're going to get different advice .

Most people in the community don't become successful property investors .

Most people on the forum , who are long term members , who listen to and take on board and act on the advice offered freely have become successful properties ?

So which group do you want to belong to ?

So who should you listen too?

That up to you

Cliff
 
John Henry . You've been asking about OTP places for around a month or more . My recollection is that most people on the forum who have responded to you have suggested alternatives .

Doesn't that say something ?

We don't gain anything by getting you to buy certain properties , but the agents you are talking to have a signiificant potential gain if they do get you too buy certain properties . They don't have those jobs because they are bad at them . They're salesmen . A good sales man can convince most people in the community to buy what they're selling .

Most people in the forum are here because they're not like most people in the community . They want or are prepared to give independent advice .
Because there isn't one way to do things , you're going to get different advice .

Most people in the community don't become successful property investors .

Most people on the forum , who are long term members , who listen to and take on board and act on the advice offered freely have become successful properties ?

So which group do you want to belong to ?

So who should you listen too?

That up to you

Cliff

Some people just don't want to listen Cliff.

They can learn the hard way, or the easy way. But they will learn.
 
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