Ipswich vs Brisbane

[arruga]

According to the Brisbane City Plan 2012 and the SEQ Regional Plan 2009-2031, the projected population growth in SEQ 2011-2031:
1. Ipswich: 286,521 (21,6%)
2. Gold Coast: 254,252 (19.2%)
3. Brisbane: 186,658 (14.1%)

As I'm looking for my first IP, it seems to me that Ipswich is the wayto go !
Someone in other thread questioned the reliability of these projections.
Also, there may be oversupply in Iswich area.

To me, the fundamentals are strong in Ipswich (high growth in the last ten years, high growth projections of population and employment, infrasctructure projects, good transport links, parks, schools, etc), but I am new in Australia and new to the property investment world.....
thoughts of more experienced investors please ?
As of 2013, Ipswich or Brisbane ? - looking for capital growth, buy and hold, reno to build equity and move on to the second one
thanks
Cheers
A.

 

[HandyAndy888]

Is it just me, or did we have this conversation not too long ago?

http://somersoft.com/forums/showthread.php?t=80818

 

[Rolf Latham]

My primary comment on that statistic is the availability of broad acreage land and council willingness to release same for resi housing

Little around Brisbane, less around GC, but lots around Ips and Centenary burbs.

ta

rolf

 

[Nigel Kibel]

What it comes down to is demand and supply.

The market is flat is Brisbane and in my view is under valued by around 10%. But when you talk about Ipswich there is lots of land available and we are unlikely to see any capital growth happening for some time.

Personally I would focus on Property 10 KM and under, I think you will not go to far wrong.

Generally when recovery starts it starts at the center then moves out.

 

[Bigtone]

What it comes down to is demand and supply.

The market is flat is Brisbane and in my view is under valued by around 10%. But when you talk about Ipswich there is lots of land available and we are unlikely to see any capital growth happening for some time.

Personally I would focus on Property 10 KM and under, I think you will not go to far wrong.

Generally when recovery starts it starts at the center then moves out.

i agree with this, the demographics and the availability of land in ipswich, make brisbane and current prices a better investment in my opinion also

 

[Nth Brisbanite]

What it comes down to is demand and supply.

The market is flat is Brisbane and in my view is under valued by around 10%. But when you talk about Ipswich there is lots of land available and we are unlikely to see any capital growth happening for some time.

Personally I would focus on Property 10 KM and under, I think you will not go to far wrong.

Generally when recovery starts it starts at the center then moves out.

I'd agree with the above even though I've been criticised for my views. It is basically Michael Yardney's view and no, I don't work for him or been to any of hispaid or unpaid programs. What do you think, Michael?

I think that it is basically demand and supply. The demand to live in inner Brisbane is going to be a lot greater than living in outer Brisbane or in mnay parts of Ipswich.

I'd go for Brisbane any day, especially something close to the CBD.

 

[norwoodman]

Close to the CBD is a bit of a subjective measurement. Would somewhere like Nundah be considered close to Brisbane? How about going a bit further north to Northgate?

 

[JT7]

I'd agree with the above even though I've been criticised for my views.

http://somersoft.com/forums/showthread.php?t=80818

I guess you may be referring to discussion on this thread.

If it is the case you are it's certainly not criticism.

It’s a public forum with many experienced contributors expressing varied views about a variety of discussions. Don’t make the assumption that it’s a personal criticism because it's not mate. Everyone’s view is respected but my view may be different to yours. It’s healthy to have robust provoking discussions. It's all good

 

[Nth Brisbanite]

http://somersoft.com/forums/showthread.php?t=80818

I guess you may be referring to discussion on this thread.

If it is the case you are it's certainly not criticism.

It’s a public forum with many experienced contributors expressing varied views about a variety of discussions. Don’t make the assumption that it’s a personal criticism because it's not mate. Everyone’s view is respected but my view may be different to yours. It’s healthy to have robust provoking discussions. It's all good

It was on another thread that I was criticised for favouring Brisbane over Raceview which is in the Ipswich area. I didn't take it as a personal criticism and I agree that it's great to have robust discussions.

Back to the thread. I've had relatives who have invested in Ipswich and have regretted it since. Their complaint was in the type of tenants that they got. I know that in Brisbane that you can get similar types but the chances of that happening are smaller especially if you are investing in well located, good quality property close to the CBD.

 

[mystery]

i agree with this, the demographics and the availability of land in ipswich, make brisbane and current prices a better investment in my opinion also

Totally agree Bigtone .... I have just finished a sub-division of a IP near Ipswich (Redbank Plains) on a property we've held for a few years. Although the investment has worked out well due to the development, if I could make the decision again I would have bought a lot closer to Brisbane CBD.

Mystery

 

[Nth Brisbanite]

Totally agree Bigtone .... I have just finished a sub-division of a IP near Ipswich (Redbank Plains) on a property we've held for a few years. Although the investment has worked out well due to the development, if I could make the decision again I would have bought a lot closer to Brisbane CBD.

Mystery

We're getting back to the old debate. For inexperienced investors, John Fitzgerald and Yardney (I think) both say that it''s safer to invest in centres where there is a large and growing population. A few years ago, Fitzgerald even ruled out the Gold and Sunshine coasts for this reason.

I basically follow their philosophy and that is why my investments haven't had much of a downturn since the GFC. I'd never invest in Ipswich, instead concentrating on the biggest cities and as close to the CBDs as possible.

 

[JT7]

Totally agree Bigtone .... I have just finished a sub-division of a IP near Ipswich (Redbank Plains) on a property we've held for a few years. Although the investment has worked out well due to the development, if I could make the decision again I would have bought a lot closer to Brisbane CBD.

Mystery

I certainly acknowledge the issue raised in relation to available land. However, affordability together with the existance of significant growth drivers is attractive. I guess it depends on your strategy and how far along you are in your journey.....

Mystery you posted a fantastic thread where you detailed an inventory of your purchases during your 30 odd year journey. It appears affordability along with the existance of these growth drivers was an important componant of your strategy.

http://somersoft.com/forums/showthread.php?t=82901

Value buying with good CF. If you had purchased closer to Brisbane CBD as stated above, and I'd assume at a higher cost, how would this have affected your purchasing power and serviceability?

Every investors situation is very different and for me it wouldn't be long before I'd max myself out of the game.....

It seems that your strategy, buying affordable property with potential to subdivide has worked extremely well.....

 

[mystery]

I certainly acknowledge the issue raised in relation to available land. However, affordability together with the existance of significant growth drivers is attractive. I guess it depends on your strategy and how far along you are in your journey.....

Mystery you posted a fantastic thread where you detailed an inventory of your purchases during your 30 odd year journey. It appears affordability along with the existance of these growth drivers was an important componant of your strategy.

http://somersoft.com/forums/showthread.php?t=82901

Value buying with good CF. If you had purchased closer to Brisbane CBD as stated above, and I'd assume at a higher cost, how would this have affected your purchasing power and serviceability?

Every investors situation is very different and for me it wouldn't be long before I'd max myself out of the game.....

It seems that your strategy, buying affordable property with potential to subdivide has worked extremely well.....

Point taken JT7, ....... But I find as I get older I like the character look of inner suburb properties over the type I usually buy. For example the most recent property purchased is a 1930 double brick shopfront building within a 5 minute walk to the central CBD in a largish regional town (see photo). I will convert it into a modern interior 4 bedroom house, ...... I'll maintain the exterior as original with improvements, but mainly add the WOW factor internally.

Value buying with good CF. If you had purchased closer to Brisbane CBD as stated above, and I'd assume at a higher cost, how would this have affected your purchasing power and serviceability?
.

It's all relative, .... sure it would have cost more to purchase, but generally you'd probably get a similar rent percentage return, ... I would have held less properties, but the equity gain would have been similar, ... the main plus side would be less tenants to worry about and the other associated costs and expenses of holding a property as you'd have fewer to fund... And hopefully a better class of tenant where I wouldn't have to continue to fix up a place after tenants have left.

Look, ... I'm not complaining, we've done well, but at times I look back and ask if I could have done it differently or better and I think that's a good thing as it shows a willingness to be a better investor.

These days I'm looking for a point of difference. For me its about keeping the motivation and drive going and renovating/developing buildings from different eras do that for me.

All the best

Mystery ...

 

[Angel]

Can we remember that the opening poster is a first time investor and not an experienced investor with a lot of funds to spend. I faced the same issues as he is when we bought our first one three years ago. Although I could see like Blind Freddy that there is much higher potential for growth in the inner ring suburbs, there was no way I would dare take out a mortgage for say $600K when we bought a perfectly good house in a far flung "growth corridor" for a bit over $400K. I believed we were doing all the correct things, using the stats he has posted here to suggest buying into a purpose-built satellite city (in our case North Lakes, the northern equivalent of Springfield) would have all the growth drivers that their salesmen spruiked.

The economy changed after the brochures were printed and after the property magazines had published stats suggesting Raceview, Springfield and North Lakes had been growing at double-digit percentages for the past ten years. So had every other postcode in South East Qld.

But things have changed. At the moment we can get a decent townhouse or basic house in an 8 klm out suburb for the same price as a beautiful house in Springfield or North Lakes. The inner ring suburb cant do anything but grow whereas those outer corridor places are sitting half vacant, the bulldozers are clearing more and more land and their prices have been dropping just as much as the inner suburbs did after the GFC and the floods.

At this moment in time, buy inner capital city. If your budget is only $300K, then get a unit or townhouse. The negative cashflow on a 5% yield for a $300K house is lower in dollar terms than the shortfall on a 5% yield on a $400K or a $500k property. For first-time purchasers, that can be the deal breaker.

 

[arruga]

Thanks guys for your feedback....really useful.
Time to take action...otherwise, the research and inspections and analyses can last forever.
Decided....Brisbane it is. Though Ipswich looks good on projections, better to play safe around a capital city (Ipswich may be a good option down the track as a long term card in my portfolio...not just yet)
Now, I narrowed it down to three options: 1) nice solid brick house with good land: ticks all the boxes except distance to CBD, it's in a northern suburb 15 Km from CBD, train at doorstep, nice parks around, 5 min drive to Chermside, nice community of houses...really nice area. 2) townhouse in Mitchelton, close to train, shops, closer to CBD (9 Km NW)...smaller, light materials, but in good shape...
Both 3 bedrooms, two bathrooms
Both at around the 360k mark, and both with 5.5% rent yield
3) townhouse in Newstead (just limit with Tenerife - inner city)...this one is listed at 399k....smaller, two bedrooms...very nice location

The two townhouses are ready to move in
The house...I can put 20k for a kitchen and garden makeover and build instant equity on it - I want to offer 350, put 20k, and property can be valued at 410 post reno...this would be my preferred option

thoughts ??
thanks
a.

 

[Nth Brisbanite]

Can we remember that the opening poster is a first time investor and not an experienced investor with a lot of funds to spend.

But things have changed. At the moment we can get a decent townhouse or basic house in an 8 klm out suburb for the same price as a beautiful house in Springfield or North Lakes. The inner ring suburb cant do anything but grow whereas those outer corridor places are sitting half vacant, the bulldozers are clearing more and more land and their prices have been dropping just as much as the inner suburbs did after the GFC and the floods.

At this moment in time, buy inner capital city.

I totally agree. As close as possible to Brisbane CBD rather than Ipswich.

In the last few years, 2 of my children have bought properties in inner city. I thought that they had done the wrong thing at that time as the properties were very old. However, I've noticed over time how much in demand their properties were both for sale and rental. Dad was wrong, kids were right!!

 

[Aaron_C]

In the last few years, 2 of my children have bought properties in inner city. I thought that they had done the wrong thing at that time as the properties were very old. However, I've noticed over time how much in demand their properties were both for sale and rental. Dad was wrong, kids were right!!

Well your kids (and others like them) are the ones who like those areas so they make the market I guess.

 

[Angel]

Now, I narrowed it down to three options: 1) nice solid brick house with good land: ticks all the boxes except distance to CBD, it's in a northern suburb 15 Km from CBD, train at doorstep, nice parks around, 5 min drive to Chermside, nice community of houses...really nice area. 2) townhouse in Mitchelton, close to train, shops, closer to CBD (9 Km NW)...smaller, light materials, but in good shape...
Both 3 bedrooms, two bathrooms
Both at around the 360k mark, and both with 5.5% rent yield
3) townhouse in Newstead (just limit with Tenerife - inner city)...this one is listed at 399k....smaller, two bedrooms...very nice location

The two townhouses are ready to move in
The house...I can put 20k for a kitchen and garden makeover and build instant equity on it - I want to offer 350, put 20k, and property can be valued at 410 post reno...this would be my preferred option

thoughts ??
thanks
a.

Good work, give yourself a gold star.

My limited experience - a or b, both a good long-term potential performer. Did you choose Geebung, Carseldine or Zillmere with train stations? Glad we talked you out of a microscopic block of land in Fitzgibbon. Probably Mitchelton would be my No1 pick.

I haven't studied Newstead. I can see why it would be popular. Are you aware of the competition from all the high rises in that general area?


Let me know if you are looking at the house at Zillmere that LJ Hooker Albany Creek has had for about a year, it has some problems.

 

[devank]

Did you choose Geebung, Carseldine or Zillmere with train stations? Glad we talked you out of a microscopic block of land in Fitzgibbon.

What are your views on these areas Angel?

 

[Highlygeared]

I just purchased a HOUSE in a quiet street in an inner ring suburb in Brissy (not flood affected, no overland flow etc) for less than $400K. The cheaper entry deals are out there but rare as hen's teeth...and you have to be super quick. Every property I zone in on has multiple buyers pursuing it...I'm sensing more urgency in the market than say, a year ago.

BTW, don't know how that frown face got up on my post but I cant get rid of it!