Low-end market in Brisbane Metropolitan

Is it a good time to get in?

Positive side

1. Low-end / blue-chip areas are less affected by market cycle.

2. Brisbane wasn't a good performer last year so maybe ready to go this year?

3. Again, supply-demand issue

Negative side

1. Interest rate rising

2. Immigration quota slashed by 50%

3. What is left for the government to manipulate the market like they did last year? (i.e. FHOG)

What is your thought?
 
Is it a good time to get in?

Positive side

1. Low-end / blue-chip areas are less affected by market cycle. FALSE

2. Brisbane wasn't a good performer last year so maybe ready to go this year? HOPE IS NOT AN INVESTMENT STRATEGY

3. Again, supply-demand issue POSSIBLY

Negative side

1. Interest rate rising CHEAPER HOMES

2. Immigration quota slashed by 50% IT'S STILL IMMIGRATION

3. What is left for the government to manipulate the market like they did last year? (i.e. FHOG) IT'S LABOR, THEY TRIP OVER THE STUPID MAT EVERY MORNING ON THE WAY INTO THE OFFICE, I'M SURE THEY'LL CONJURE UP SOMETHING

What is your thought?

my thoughts are blue.
 
We've been all cashed up and ready to buy in Brisbane since January, but glad we waited. The market here seems to have run out of puff. Increasing stock coming on the market.

It's actually a bit of a 2 speed market from a buyer's point of view. Really well located resi at prices where the sellers are in reality rather than in a dream world is still getting sold really fast. We've missed 2 great deals by procrastinating. But most of the market seems to be be stuck in fossilised molasses.

We are in no hurry. Renting month to month waiting for the property we live in to sell. Lovely place but not a buyer in sight. If we wait long enough perhaps the price may sink low enough to be in our budget.
 
Brisbane market did go up so much from last year

I do not know if the Brisbane market flats or not since last year or not but I saw the price went up a lot from last year and have not decreased much. See the charge attached.

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If we wait long enough perhaps the price may sink low enough to be in our budget.

I wouldn't wait too long as you don't know what's around the corner. I doubt very much whether prices will drop much at all. In the area where I live, houses are still selling quickly at fairly good prices.
 
I wouldn't wait too long as you don't know what's around the corner. I doubt very much whether prices will drop much at all. In the area where I live, houses are still selling quickly at fairly good prices.

I agree. Good quality properties are rare and even rarer at reasonable prices. IMO most on the market (Brisbane Metro) at the moment do not yield even 5%.
 
my thoughts are blue.

What other colour would they be? :p ;)

Agree, by the way. In my experience it is the high and low end that vary the most when times become uncertain. :(

Brissy has not had the run that Melbourne and Sydney enjoyed recently. Hence when things do pick up, it may have more legs in it, HOWEVER, my current impressions is that we are entering an era reflective of the early 1990's, for those familiar with those times.

I am of the impression (and this is merely my opinion, not advice) that we will see sideways tracking for some time, perhaps following inflation and not much more. I would imagine five years maybe a little more or a little less.

There will be the usual markets withiin markets caveats apply as there will be better performers during that time and also those areas that may soften and retract.

IMHO there is no rush to purchase (in a general sense) right now, unless deals are too sweet and yields reflective of the risk (edit)...........or one can add value and increase equity and yield. :cool:
 
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There are a few high end houses (between $1M and $3M range) in my area that are languishing on the selling market. I went to an auction for a house that has been on the market a longish time. No bids at all. I took a paddle just in case it went for a song :D. Hubby was a little worried :eek:. He quietly suggested I take the paddle from oldest son who was holding it, just in case he got fidgety. Oldest son offered to give us his first born if we bought it.

Oldest son is trying to convince me it is a great investment. I pointed out to him that the vendors cannot even sell for what they paid three years ago, let alone the stamp duties paid back then, and I suggested that they may think it was less than a "great investment".

Another house that was aiming at around mid $1M is now looking for offers over $1M. They have long moved out but cannot sell it.

I know we could stretch to something like this, but our kids would NEVER leave home :eek: and we would be trading income producing assets to live in a "very nice" house. We possibly would have done it ten years ago (and did seriously contemplate it back then when a few landmark houses came up) but each time, we decided to keep the income flowing instead of cashing in and living in a gorgeous house but worrying about whether we could pay the rates.
 
My thinking parallels Player's, and most analysts are saying growth will decrease to single digits this year.

But I also believe downside risk associated with European credit default and China credit contraction is rising. If I had to state a probability of this happening, and adversely impacting Australian credit flows and property prices, I'd say 15% by the end of the year, and 75% within 3 years. How low our prices could fall will depend on cost and volume of foreign credit to our banks.

I therefore am looking for value add opportunities and allocating a higher % of capital to property hedge strategies.
 
I wouldn't wait too long as you don't know what's around the corner. I doubt very much whether prices will drop much at all. In the area where I live, houses are still selling quickly at fairly good prices.

Maybe you are in one of the areas in the Residex report which isn't losing value, but the place we are living in must be in the 53% of suburbs which is - it is dropping like a stone. 18% down from original asking price and not even an inspection in the last 3 weeks.

We even told the agent not to worry about the 24 hour notice to tenants, if they get a prospective buyer just ring and tell us they are on their way over.

I feel sorry for the owner - young man about our son's age with 2 little kids and probably in way over his head. Property it not easy in sluggish markets.
 
I feel sorry for the owner - young man about our son's age with 2 little kids and probably in way over his head. Property it not easy in sluggish markets.
The only way to find that out is see what they paided for the property and how long they have had control over the property,Morningside is like
most up market area's,you have about ten streets that have the high-end value all the rest just span off those high land value properties,maybe the property is overpriced from the start 18% down from the starting price,if your talking above 650k then the agent sure does not understand the value part in that area..willair..
 
Brissy , see my big green dot up the top there , that shows I'm a big wig round here obviously & in my humble opinion I would not buy Brissy for 12-18 mths min.

Brissy was way under other cap's pricing only 10 yrs ago , so it's quadrupled very quickly.
And then, only Qld can build , divide and generally move at three times the speed of sound like no other state, which they have and you'll notice their r e for sale sites doubling in only the last 6 -12 mths. Lots on market now but that's only the beginning as all the newer developments to come get finished and meanwhile things slow . They have a long way to go yet and it could even get back to the old flying the interstaters up for free days with schemes and deals, just like last time .
And the upper ends, way over priced imo, way over. They saw huge drops a yr or so back which I think we'll start seeing more & more of from here on up there overall as things begin to slow. B/c basically the whole state has hardley stopped for 10 yrs , massive gains.
Along with everything else going on economically , I reckon it is definitely due for a correction.
And another thing is that lots of Southerners moved up looking for cheaper housing and it takes people on average 3 yrs to start missing home, a lot will decide to move back.
Be patient and save yourself a couple of million bucks on upper and a 100 or two on lower .
Just mo..

Cheers
 
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what is morningside like?

it looks really close to the city of brisbane....

has the growth in the area been high in the last few years?

what sort of demographich for morningside?
 
Hi Winston,

What is a property hedge strategy you employ? i am curious.

MJK:D

More and more I see Aussie property as a proxy for commodities and dependent on foreign credit flows. (higher global risk appetite -> increased global demand for commodities -> increased aussie exports -> increased aud -> increased foreign capital available to Aussie banks via carry trade and uptake of corporate and govt bond issuance).

In a risk averse climate, when risk associated with global capital flows increases, I long assets that perform well in this environment (gold in AUD) and short those that drop in value (palladium etfs and lithium stocks). I also run trading accounts in AUD and USD and move capital between them.

I haven't looked into it, but shorting Aussie REITs, the AUD, or the banks would be a more direct hedge.
 
I am of the impression (and this is merely my opinion, not advice) that we will see sideways tracking for some time, perhaps following inflation and not much more. I would imagine five years maybe a little more or a little less.

There will be the usual markets withiin markets caveats apply as there will be better performers during that time and also those areas that may soften and retract.

i think the old "profit is made when you buy" saying will apply more than ever in the next 5 years.
 
More and more I see Aussie property as a proxy for commodities and dependent on foreign credit flows. (higher global risk appetite -> increased global demand for commodities -> increased aussie exports -> increased aud -> increased foreign capital available to Aussie banks via carry trade and uptake of corporate and govt bond issuance).

In a risk averse climate, when risk associated with global capital flows increases, I long assets that perform well in this environment (gold in AUD) and short those that drop in value (palladium etfs and lithium stocks). I also run trading accounts in AUD and USD and move capital between them.

I haven't looked into it, but shorting Aussie REITs, the AUD, or the banks would be a more direct hedge.

Thanks, Food for thought.

Cheers

MJK
 
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