Forget Melbourne. Which State to buy in now?

[The_Bludger]

No value in Melbourne at the moment in my view. Others may disagree and that's cool.

Which state do you believe will move next? Have a large deposit I need to throw at a house and I'm getting frustrated.

 

[Trogdor]

No value in Melbourne at the moment in my view. Others may disagree and that's cool.

Which state do you believe will move next? Have a large deposit I need to throw at a house and I'm getting frustrated.

Good post, and couldn't agree more....

Keen to hear responses.

 

[Ridin-High]

Im purchasing in QLD, because land tax and to diversfy

Eg. I paid about $2700 this yr. If i purchase another property (say similar land val to the ones i already own so another 150k on top) that pushes that to $5100++ so cuts into my holding costs quite abit.

similar holding cost if im to purchase interstate for the first yr (because the yield is lower) but gains pace over the nsw one down the track as the landtax isn't compounding as much.

I'm using a B.A for my QLD one.

Regs,

RH

Ps. Hopefully i'll join the likes of troggy and dazz and add some commercial flavour down the track and pass that nasty land tax onto the tenant.

 

[BV]

Which state do you believe will move next?

IMO no other state will see such high price increases in the short term.
It's also a little late to buy interstate because prices have already increased.

 

[rugrat]

ACT.

I'm not bias, I swear...

 

[pickle pickle]

http://www.realestate.com.au/property-house-wa-bunbury-105884072?tm=1269776938&c=55462079&t=res

If I was in the market I would be looking at Ballarat and Bunbury. The link attached is a house in Bunbury which on the surface looks like it has some value.

 

[jimmyjj]

My vote is for Brisbane, followed by Perth.

In saying that, my most recent purchase was actually in Geraldton based on the town having diverse industries and not predominantly a mining town, although with the exposure it does have to the mining industry I believe it will see significant gain when the mining boom kicks in (they are already expanding the existing port, and planning to open a new port in 2014!)

 

[Player]

Aaaand, the winner is................Synndney

 

[HandyAndy888]

I think the question is a bit flawed. You say "Melbourne" then ask about "State".

There are soooo many bargains, especially in areas I like to call "semi-regional" and they exist in all the states. in QLD, check out Toowoomba, Warwick, and surprisingly, the Sunshine Coast seems like good buying to me at the moment.

In Victoria, I still can't go past Ballarat and the cheap entry points of Horsham.

My 2.5 cents.

 

[Propertunity]

Aaaand, the winner is................Synndney

I declare my bias but I have to agree (and yes, I know Sydney is not a state).

They say NSW stands for Newcastle, Sydney & Wollongong - and so if you feel a bit 'priced out' of Sydney, I'd be looking for opportunities within a 1 - 1.5 hour driving radius - as these areas historically get a boost from Sydney's boom.

 

[aussierogue]

Which State? The United State (s).

Buy 5 x 100k in a decnt area and hold on for 10-15 years.

 

[peastman]

Penrith looks pretty good value to me, overdue for a rise.

 

[bene313]

In Victoria, I still can't go past Ballarat and the cheap entry points of Horsham.

Has the ripple moved out to VIC regionals yet?

 

[RocketMan]

why would you buy in Ballarat unless you want to own acres of land for farming/hobby farming?

 

[MTR]

http://www.realestate.com.au/property-house-wa-bunbury-105884072?tm=1269776938&c=55462079&t=res

If I was in the market I would be looking at Ballarat and Bunbury. The link attached is a house in Bunbury which on the surface looks like it has some value.

Hi Pickle
That Bunbury property has been sub-divided, not sure how much more value you can add to this.
Also, Jay Stanley he is a switched on RE agent but he works hard for his vendor. I used him with my last sale in the area.

Cheers, MTR

 

[accumulator]

I agree on the Bunbury property, look around because you should be able to find something you can subdivide later for not a lot more cash.

 

[MTR]

I also think you could be on a winner with Bunbury, it has certainly rebounded from 2006 crash.
My first pick though would without a doubt be Syd, central coast, I missed out the inner west.

 

[MTR]

This may interest some

Hi all

I really like this guy Giann, have been following him for a while, also part of D Bolholt's crew. He seems to always be on the money.
I can relate to his logic, when Perth got too expensive I started buying over East at that time I thought it was as cheap and chips.


This is what he has to say,

"I'm predicting Brisbane and the surrounding areas to be the next hot spot for real estate.

Why?

Well, first off, I hang around with some very smart people who know their stuff and spend lots of money on research and development.

They're talking Brisbane up... But here's why I think prices will accelerate there in the next 2 - 3 years...

Before I get to that, notice my time frame... 2-3 years... it's very important.

I'm not saying prices are going to go crazy next week, but you'll look back in 2-3 years and I believe we'll have a raging boom similar to what's happening in Melbourne right now.

Here's why...

Melbourne at the moment is becoming seriously unaffordable.

The year-to-date rise of real estate has hit 25%. That's off the back of an 18% increase from the previous year's rise.

The median house price is over $500,000.

So whilst you can still make money if you can find value, the easy money will be a lot harder to make in Melbourne.

The price-boom scenario will move to Sydney. Sydney has had a fairly flat 6 years leading up to this year, and it will take off in the next 2 years, guaranteed.

...but it too will come to a more consistent growth pattern than the raging boom scenario.

What has this got to do with Brisbane?

I can tell you that when prices go crazy in Melbourne and Sydney and price out investors, they'll move to a more affordable area in comparison to the two I just mentioned.

I saw this development in 2000 - 2002. I bought lots of property in Melbourne around that time when the market was hot.

Brisbane was chugging along OK, but nothing in comparison to Melbourne. I switched my focus to Brisbane, which was about 30% cheaper than Melbourne with regards to the type of stock I was looking at.

I invested heavily in the inner-city of Brisbane and made a killing.

The Melbourne market slowed and the Brisbane market took off like crazy.

Here's what happens... Investors get conditioned to price.

When you're consistently looking at investment property around the $500 - $700k range and then you're offered real estate at the $300-$500k range, you think that's a bargain.

Folks who live in Melbourne and Sydney are conditioned to the high prices and start looking to other states to invest in.

Sure, there are other factors but don't underestimate how price conditioning can influence investors.

I remember not so long ago, around 2006 when the Perth folk all rushed across the Nullarbor to invest in Melbourne real estate because it was a lot cheaper than what investment stock in their city was selling at.

This will happen to all the Melbourne and Sydney folk, and they will all pile into Brisbane and create a mini-boom in that market.

I'll reinforce that there are other factors, but I think you should get ahead of the curve and consider taking positions in that market, and at minimum do some research and homework, because I think there will be some easy money to be made."

Signed with Success,
Jon Giaan
Knowledge Source

 

[R377]

My vote is for Brisbane, followed by Perth.

In saying that, my most recent purchase was actually in Geraldton based on the town having diverse industries and not predominantly a mining town, although with the exposure it does have to the mining industry I believe it will see significant gain when the mining boom kicks in (they are already expanding the existing port, and planning to open a new port in 2014!)

another vote for geraldton - will be a standout in the upcoming years

 

[MichaelW]

Melbourne at the moment is becoming seriously unaffordable.

The price-boom scenario will move to Sydney. Sydney has had a fairly flat 6 years leading up to this year, and it will take off in the next 2 years, guaranteed.

...but it too will come to a more consistent growth pattern than the raging boom scenario.

What has this got to do with Brisbane?

I can tell you that when prices go crazy in Melbourne and Sydney and price out investors, they'll move to a more affordable area in comparison to the two I just mentioned.

MTR,

Great post, kudos.

I've trimmed that quote to the pertinent elements. I agree completely with that perception. So, to summarise:

1. Melbourne: Right now and probably at the tail end of its boom.
2. Sydney: Next in line and probably already moving.
3. Brisbane: To follow Melbourne and Sydney.

So Melbourne lead this boom as Michael Yardney, to his credit, pointed out it would before anything started happening. I argued Sydney would go first but he was right this time. Now Sydney is about to have its day in the sun so if you have a position in this market, preferably in the upper percentiles, then you will do well in the next 2 years. Then expect Brisbane to do its stellar thing when everyone in Melbourne and Sydney start looking for value.

I skipped over it above, but quality homes are peforming better in this stage of the cycle too. Entry level homes do well in doom and gloom as the top end takes a hammering. But now we've moved beyond the doom and gloom and all the upgraders are cashing in and positioning themselves in their dream PPOR now the markets have settled. Already, the upgrader market is demonstrably outperforming the mortgage belt. Expect this to continue in the short term. Here's a link from today's media with stats included in this regard:

Capital city house prices extend surge

The home price performance gap is evident in the split between quarterly price gains in the most affordable suburbs, which increased about 2 per cent and the most expensive suburbs, which recorded 4 per cent quarterly growth, RP Data said.

Regards,
Michael