Is Brisbane nearing the top of the cycle?

V

van75

Hi guys

I have been reading that Brisbane has had the strongest growth over the past few years compared to other cities.

However there are other opinions that the growth may have been too strong that it may mean that it is reaching the top of the cycle too quickly.

I'm curious to hear what do people here think, would people still invest in Brisbane now? Is there much more growth left?

Cheers
 
I think that growth will still continue for the following reasons:

1. There is very little land to buy in Brisbane even on the outskirts such as Caboolture and Beenleigh.

2. Migration is still very strong with skilled workers arriving from interstate and around the world to work on infrastructure projects such as roads and water.

3. Head offices are relocating to Brisbane and with them professionals.

Brisbane may not grow at 20% per year but should still increase at a fairly steady rate.
 
I'm most concerned about the availability of credit, to be honest. That will trump all the fundamentals, because fundamentals don't necessarily translate to higher prices unless credit is available.
Alex
 
I agree Alex, the interest rates may force the market to flatten out or reduce to a small CG for a year or two. I don’t believe the prices will recede as a result. Hope I'm wrong.
 
Rental vacancies are very tight , and that wont disappear overnight. In fact I think they will get worse before getting better.
People want to buy not rent , and there is no reason to suspect that long term goal will change.

In 2 years time you might like to ask the same question, but you will probably still not get a definite answer.
You don't have to get the best possible deal , that rarely happens. Just getting into the market at or a little below market value is not a bad strategy, if you are using leverage to obtain wealth.
Even paying more than market value is ok if you have something special planned for a property , but I don't do that at the moment,
eg subdidvide or build a block of units/ etc
 
Interest rates are going to be the killer but all the other fundamentals for prices and rents to go up are there, Population growth
Large infrastructure projects
Business setting up, up there
Very low vacancy rates

The other give away for me is the unsolicited mail I receive from RE to sell my IP's for me, which always comes thick and fast when the market is moving.
Currently, there is money there and people aren't afraid to spend it because they feel secure with the economic climate but as interest rates climb this may well change.
 
For medium/long term investing, I still think that Brisbane has got a lot going for it. Even if there is a slowdown for a little while, it will eventually boom again because of its fundamentals. There is talk that interest rate increases have just about stopped and there may even be decreases towards the end of this year.
 
It also depends whether u believe in China story or not as well, as QLD and WA are the biggest beneficiaries of this boom. A lot of the demand will suddenly disappear if the boom doesn't continue..
 
In the short to medium term, there is a difference between believing in the china story and believing that it'll just power through a US recession.
Alex
 
Whatever it is... I think Brisbane property prices will still grow as Brisbane has all the fundamentals needed for capital growth... I am predicting a constant rate of at least 6% per annum over the next 10 years or more for dominant suburbs.

PS: buy nearest to CBD as possible... cant really go wrong with them... house prices near to Brisbane CBD are still lower compared to other capital cities like Sydney, Melbourne and Perth...

However, with current unpredictable future economy, it is better not to borrow too much to the extend that you are putting yourself at the edge...

Good luck!
 
Guan, what are your thoughts about the fact that the credit crunch may seriously affect the amount people can borrow in the short and even medium terms? Do you really think we'll still get constant, even capital growth in this sort of environment?
Alex
 
van75 said:
Hi guys

I have been reading that Brisbane has had the strongest growth over the past few years compared to other cities.

However there are other opinions that the growth may have been too strong that it may mean that it is reaching the top of the cycle too quickly.

I'm curious to hear what do people here think, would people still invest in Brisbane now? Is there much more growth left?

Cheers
Click to expand...
Van you can look at it both ways,if borrowers are starting to pay more for credit,and the Banks push the home loan rates higher then they are today, property prices will slow in several area's just like before,this time will be no different and i think it has already started,the high end market above the one mill mark will be first,those properties are starting to sit the vendors
either take the property off the market,or drop the price that is not happening yet,but it will happen very quickly, that's why so many want the quick auction system,and that is not always a 100% quick fix most are passed in from what i see,and the ones that do sell are desperate to cut and run then look for someone to blame..

The facts that i can't understand is if the media keep playing the same line that there is no properties to rent in inner Brisbane,they they should talk to the small number of property investors that i have known for 20 years,
several i know can't rent their properties,some with no tenants for up too 12 weeks so it does makes you think what is happening in the real world, but talk to any real estate agent and it's still the same line,THE SKY'S THE LIMIT:rolleyes:.......
willair..
 
Had an interesting chat to my property manager this morning, she seems to think that things may be cooling off a bit in Brisbane, down in the Logan area and with the latest rate rise maybe some good opportunities might arise in the near future. I found this a bit of a surprise to what I thought was happening but she is on the ground up there so it might be worth considering as she has been fairly reliable for me in the past.
Again this isn't fact but I thought worth passing on to see if this is starting to be seen by others.
 
I was to buy a house in brisbane in the next few weeks but I had a conversation with an agent who said listings are down and so is buyer enquiry. This was only one person of course. So I am now wondering whether to wait a little bit - who knows.
Cairns has quite a few "reduced" properties at the moment - something I havent seen a lot of in Cairns in the last year. Cairns (and other QLD towns up the coast) is to some extent affected by the Brisbane market i.e. they move in some accordance.
There are still a lot of people moving to Brisbane or expected to move to Brisbane/SEQ though and that creates demand.
I read in the paper today ANZ are predicting another rate rise so that will also affect demand.
All too much for me to predict. I would be annoyed if i bought now and then in 6 mths time properties in brisbane were cheaper I would be "damn I wished I had waited".
Alternatively they will probably just keep creeping up but not as booming as last year.
 
Gatoblanco said:
All too much for me to predict. I would be annoyed if i bought now and then in 6 mths time properties in brisbane were cheaper I would be "damn I wished I had waited"
Click to expand...

Possibly, but if you don't buy now, and it falls in 6 months, what do you do then? Do you buy then, or do you think 'it's started falling, so maybe it'll keep falling'. At what point do you actually buy? I realise buying and watching it fall isn't a good feeling, but you also have to weigh that against the possibility you might freeze and not buy anything at all.
Alex
 
I will definitely buy. Not buying at all is not an option I am considering. I am keen to buy. I just was wondering about the current situation and whether it might be best to wait a little.. perhaps. If it falls in six mths and the market hadnt started to rise then I probably wouldnt buy until i saw some evidence (i.e. increased prices for listings, increased buyer enquiry etc.) that it was rising again.
Right now i just dont know if it is going to fall in brisbane I dont know of any evidence yet that it has already started to fall, but i get the feeling it has slowed down.
So to answer your question the point that I would buy in this hypothetical scenario is the point when I could see the market starting to rise again.
 
Imagine that this was 1990. The market is going to fall for 5+ years. In 99/2000, it wasn't CLEAR that the market was rising. In retrospect the best times to buy were around the mid-90s, when it certainly didn't look like the market was rising.

You see where I'm going with this. In a downmarket, it may not look like it's rising until the boom is well under way.
Alex
 
If you can afford to buy now and keep it long term, it doesn't matter when you buy. It's impossible to pick the market. In 10 years time, what does it matter if you paid a little more than what you should have? A relative of mine paid $320,000 for a house in Wooloowin 4 years ago. 6 months later he had some buyer's remorse thinking that he paid $10,000 too much. Guess what it is worth now? - $600,000 plus!!!

As Alex said, the biggest danger is that you procrasinate so long and see so many problems, that you end up doing nothing.

Long term, Brisbane has got a lot going for it.
 
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