In early 2008 I purchased a 4 bed 2 bath house and land package in Trinity Green, Dalby through Blue Horizons. I settled on the land in May 2008 and the house was ready for tenants by February 2009. Altogether, including house, land, stamp duty, Blue Horizon's commission I paid $337,695 for the property. By purchasing a house and land package I saved on stamp duty, but this savings was nothing compared to the $13,142.92 I paid in holding costs between the time I settled on the land to the time tenants first started paying rent. Note, these costs were on top of builders construction costs, or as I call them ‘pay as you go’ expenses and comprised of interest building drawdowns and land loans, electricity used during construction, council rates, etc. I had to come up with the money for these before I ever received one cent in rent. After construction my house sat vacant for 2 months before securing a 1 year lease from Origin Energy for $520 pw. I was fortunate that these tenants ended up staying for a total of 17 months. Why I felt so grateful is because only 6 months after commencing the lease, I began receiving rental market newsletters from my rental manager reporting rising vacancy rates with urgent advice to all property owners who had empty dwellings to consider drastically lowering rent to attract tenants. I consider myself one of the lucky ones who, when Origin vacated, was able to secure a new tenant fairly quickly, though I only did so by dropping the rent to $350 pw and allowing pets. The dogs are 'outdoor only dogs' and are a bit of a compromise but I knew I had to take this risk just to rent the property. I knew this because of the many vacancies in the vicinity, such as the neighbouring property owned by a colleague of mine who also purchased through Blue Horizon and whose property sat empty from March 2010 to December 2010.
I was attracted to buy and build in Dalby because I read in the Blue Horizon literature how rents for new homes in Dalby were securing leases accruing $500+ pw rents due to the emerging energy project planned for the area. It was also noted that residential land in Dalby would naturally rise in value since most land was so flood prone that to develop new estates, council engineers required the expensive exercise exercise of carting in dirt to raise the lots above flood level. In turn it was assumed this extra development cost would naturally raise the value of the land I owned. Perhaps this is so, though I've seen a continued roll out of new estates, one after the other in succession ever since I first bought my land in 2008 with more on the way. I see plenty of blocks of land around Dalby currently selling for the same price I paid for mine and less. There are also 3 houses on my street that are vacant and have been for sale for more than 6 months.
According to SQM Research vacancy rate sits at 8.1% so there is obviously an oversupply and anyone considering buying into the region for investment should do their own homework and not rely on the selected facts that others present. For instance, the advent of coal seam gas is controversial and its development might not be as straight forward and clear sailing as initially thought. I hope anyone considering investing in Dalby would have seen the recent 4 Corner's expose showing the adverse effect the coal seam gas 'fracking' as it is called, is already having on Dalby's agricultural sector and public health.
Since purchasing this property, I've learned how to conduct my own research, and now have a checklist of 20 questions whose boxes must be ticked 'yes' before I will consider buying. These include both general and specific topics such as conditions that the population must growing faster than the state and national averages and already be over 15,000 and there must be a wide diversity of already established industries, not just promises of new projects that may or may not eventuate. I'm holding onto the Dalby property because I already own it and I find it costly to chop, change, buy and sell and it is possible that the projects will go ahead sometime in the future. In the meantime I'm looking elsewhere.