Rocky , The next Big Thing ??

[onlyone]

Thank you Sea Change for the information that you posted about Rocky, I have only one IP that is at Parkhurst that I purchased about 6 months ago with tenants already in there, I have already noticed that the prices have started to go, but not to sure about the rental market. When we purchased rentals were very low and now needing tenants in, there are a lot of rentals around, keeping fingers crossed that tenants move in soon. This is my first post although ive been keeping my eyes in here for quite a while, so anyone got any more info on Parkhurst would appreciate it. Thanks Sea Change for your information you post, its definitely worth reading.Hope this post is ok.

Onlyone

 

[fatboy4]

I've read most of this thread- (it's late...) about 10 pages of the 13 and it's all very interesting. I think S-C should be congratulated for putting up the info and having the courage to put his money where his mouth his. I agree that the sarcastic posts are unnecessary- a few big egos?

As someone who lives in Bundy and has invested in this region a few opinions:

Rocky is a lot like Gympie, Maryborough and Bundy- solid towns with seachange resorts nearby- all of which have experienced phenomenal CG recently.

As has been noted Bundy and MB have done very well, though later than the coastal "hot spots" (Bargara Beach, Hervey Bay, Rainbow Beach)

I owned property in MB for over 10 years and sold (a bit too early) last year. Yields were good but there was nooo growth for most of those ten years. IN the end we did OK.

Hervey Bay and Bundy were much the same in terms of CG. Low...

It seems to me that, stats aside, if MB, Bundy et al can experience the growth they did last year and into this year, then there is no reason why Rocky cannot. Indeed it should. My feedback in BUndy is that things are picking up again.

People buying in Rocky seem to be very well informed. I expect that it will achieve great capital growth and then plateau like many other regional areas have in the past.

As long as investors are prepared for this and have the means to hold they should do well in the short term and the longer term.

My two bob's worth on Rocky...

Re agents: most who I speak to are pretty laid back (agents in MB, Bundy and Hervey Bay) compared to the Brissy ones. You can take this as less professional and many probably are. Maybe it's the heat (lol) or the lack of competition...But I have to say that most of them are decent people who really do know what is happening and are happy to tell investors. I think it is wise to balance data from the various official sources with anecdotal stuff from agents and to go there and look around.

Someone asking about cheap coastal land in Qld.

How about Saunder's Beach north of Townsville. My in-laws had a house there and sold it (absolute beachfront) for (just) less than 200k in mid '03. I have seen one for not much more on the net. This has to be great buying considering proximity to Tvl and the price of beachfront near other major cities (and it is actually sand). I have no idea how much land one or two streets back is but it might fit the budget.

BTW: I don't own property in Rocky or Tvl or Saunders Beach

 

[see_change]

From Last Saturdays Bulletin

Two articles on the realestate market

" City house Prices continue to climb"

The good times continue to roll for home owners in Rockhampton, with preliminary june quarter figures confirming strong demand continuing for Beef cpaital real estate .... Preliminary figures release to mid May which indicate a median price of 137K for the City .... This would be a 6.2% increase on the March quarter median house price of 129K

Kas Woch is quoted as saying " Investors chasing ( rental ) properties under 100K have been driving the market for the last 18 months " " thay are sill buying , but they are beginning to buy into the 110,120 and 130 bracket" " the Rockhampton market is still strong and investors are still saying it is the cheapest ( of the State's regional capitals )


Second article is on rentals with headline

"house rental market tightens sharply"

with the " the house rental market in rockhampton continues to be tight following the opening of the Lakes Creek meatworks"

See Change

 

[Jacque]

Interesting bit about the rental market being tight, as the last two agents I've spoken to up there very recently tell me there is still an oversupply and tenants have heaps to choose from!
Mind you, with the meatworks opening up, let's hope that the situation improves somewhat.

 

[poscash]

Yesterday my property manager up there told me houses in the $130-$180 per week bracket are in high demand.

 

[emcdonald]

first post, please be kind...

I went through my schooling and university years in Rockhampton and witnessed my parents make good profits on several qlders they purchased and rennovated in the early 1990's on the South Side near St Peters Primary school. Their first purchase was a deceased estate for $40,000 (3brd + sleepout triple gabled qlder) and it sold 3 years later for $110,000. We later moved to a four bedroom brick home on an acre in Gracemere (around 10 minutes out of Rockhampton CBD) where my parents purcahsed the home for $150,000 and sold it 12 years later ( with pool, fully a/c, landscaped etc) for $180,000.

I'm now living in Brisbane and my question is:

Is the housing market such in Rockhampton that rennovators still stand to make a profit?

I have kept in contact with local agents at Pat O'Driscoll and L.J. Hooker and their opinion on the market is that properties in the $100K to $160K range have been turning over quite regularly over the past 6 months which they attributed to investors. Their comment on properties in a higher price brackett is that the time on market has lengthened and that buyers are more likely to purchase rennovators for themselves rather than already completed houses.

Does anyone else have an opinion?

all feedback very welcome (please go easy )

cheers e

 

[Aceyducey]

emc,

Do you intend to reno & sell or reno & hold (with higher rentals, bigger LOC, etc) or reno & live in?

It gets down to the profit margins that you are happy with making. I look for at least 30% over the purchase price in a six month period. That's after paying for the reno, holding costs, etc.

What level are you happy with? And in which timeframe?

My experience elsewhere is that there is a reno cycle that co-exists with the housing cycle....during the first half of a boom people look to buy new constructions, OTP & renovated houses....basically, money is no issue. In the second half of the boom there is an upsurge in developments & home renovators looking to profit.

At the peak of the boom people begin purchasing reno properties enmasse as 'investments' then conduct renos themselves with the aim of profiting...only many of them are too late & overcapitalise through not understanding the market then fall victim to suppressed prices.

Also at this point the focus begins swinging towards adding value rather than upsizing/downsizing dwellings...so people begin using their equity to reno rather than buy a new property to live in.

Just after the boom, renovation is in & it remains the preference to buy unrenovated & do-it-yourself until just before the start of the next boom, when people begin getting sick of it & looking for a less work & stress solution - ie: buy newer houses.


For awhile pre-reno properties were selling for higher prices than renovated ones in the areas we were watching - simply because people were paying a price based on their future profit anticipation rather than market reality.

Right now this is virtually over & we're mostly out of reno mode (except updates for CG in our existing portfolio & we'll buy & reno bargains as they arise).

Of course there is a lag effect out to areas like Rocky...so I can't speak for the local economy. However some red flags to watch for:
Are REAs pushing unrenovated properties heavily yet?
Is there increased interest in unrenovated houses vs renovated ones?
What is the price premium for a renovated property over a similar unrenovated one right now?
How busy are builders doing renos vs new building?


Cheers,

Aceyducey

 

[ani]

first post, please be kind...

I went through my schooling and university years in Rockhampton and witnessed my parents make good profits on several qlders they purchased and rennovated in the early 1990's on the South Side near St Peters Primary school. Their first purchase was a deceased estate for $40,000 (3brd + sleepout triple gabled qlder) and it sold 3 years later for $110,000. We later moved to a four bedroom brick home on an acre in Gracemere (around 10 minutes out of Rockhampton CBD) where my parents purcahsed the home for $150,000 and sold it 12 years later ( with pool, fully a/c, landscaped etc) for $180,000.

I'm now living in Brisbane and my question is:

Is the housing market such in Rockhampton that rennovators still stand to make a profit?

I have kept in contact with local agents at Pat O'Driscoll and L.J. Hooker and their opinion on the market is that properties in the $100K to $160K range have been turning over quite regularly over the past 6 months which they attributed to investors. Their comment on properties in a higher price brackett is that the time on market has lengthened and that buyers are more likely to purchase rennovators for themselves rather than already completed houses.

Does anyone else have an opinion?

all feedback very welcome (please go easy )

cheers e

Hi e

From my chats to agents in Rocky, I don't think the returns are there in a reno. A highset selling at 110ish, needing new bathroom and kitchen, they reckon will sell for 125k renovated.

Definitely not worth it to me

cheers
ani

 

[see_change]

My observations from when we were buying was that there wasn't a lot of money to be made in reonvations.

The people who were renovating were making money because they were doing the work , and they were holding the properties for a preiod of time during which the prices had gone up anyway.

If you're planning on doing the work your self and you know what you're doing , maybe.... BUT there is a shortage of builders in rockhampton and if you're not based in Rockhampton, doing long distance reno's is something for people with good contacts and experinence.

We did one long distance reno and bought a second property prior to the first being completed , with the intention of renoing the socond one. After our first experience we ended up not going ahead with the second reno. We both work and not being on hand to keep a close eye on what the builder (wasn't ) doing was a pain. My wife ended up doing a short notice visit to brisbane ( from sydney ) to keep the builder on his toes before things started happening. What we were told should be a two week job ended up blowing out to about three months...

See Change

 

[eiger]

Wow,
what a long but interesting thread. So much info, now...
I've been looking for ages for a really high yielding property. Looks to me like Rocky may be the go. Does anyone know of other areas with higher yields. As long as it's somewhere in Qld, i'm happy, the capital growth is only a bonus for me, which may or may not happen in Rocky, going off the reasoning from this thread.
Also a few concerns about the mixed feedback on rental vacancies, some saying it's low, others saying tenants have soooo much choice,
hmmmmm....
it's a real toss up between Cairns and Rocky for me... I must admit though, Cairns is also bringing my emotions into the equation...I love the diving up there

 

[Kevin Hockey]

Hi Eiger,

I haven't looked too seriously myself yet but I am going to Port Douglas next month. From all reports the Townsville and Cairns area may suit you more. I still think Cairns being such a popular tourist destination still has growth potential, even after the boom has finished there. North Qld began after southern Qld and I am led to believe hasn't finished yet.

As I said tho', my research so far has been quite limited so make sure you do your own research.

Kev

www.nundahrealestate.com.au

 

[eiger]

The thing is,
I have some stats from Herron Todd White (Independent Property Advisors) who are based in Cairns (may lead to bias?). 07/4057 0200
Anyway,
the comparative Analysis of Queensland Property Markets July 2004, shows the Cairns' prices on houses or units are still rising slightly, however, Rocky has already hit the peak.
Also the rental vacancy is less in Cairns as opposed to Rocky.
I haven't looked up stats on popuation, or population growth, but if Rocky has only 60,000, I'm sure Cairns has a larger population, which should provide more stability to future growth and industry.
Hope this helps Astro boys case, as it sounds like he really doesn't like Rocky. Ha, haaa...

 

[see_change]

The thing is,
I have some stats from Herron Todd White (Independent Property Advisors) who are based in Cairns (may lead to bias?). 07/4057 0200
Anyway,
the comparative Analysis of Queensland Property Markets July 2004, shows the Cairns' prices on houses or units are still rising slightly, however, Rocky has already hit the peak.
Also the rental vacancy is less in Cairns as opposed to Rocky.
I haven't looked up stats on popuation, or population growth, but if Rocky has only 60,000, I'm sure Cairns has a larger population, which should provide more stability to future growth and industry.
Hope this helps Astro boys case, as it sounds like he really doesn't like Rocky. Ha, haaa...

I looked at Cairns , however the thing that put me off Cairns is that it is very dependant on the tourism market . At times it has low vacancies and high returns but at other times in the cycle, vacancies are relatively high. I wanted somewhere that I knew that I'd still be able to get reasonable returns on regardless of the market.

The places we bought in rocky are all in good condition , centrally located , on quiet streets and in the popular rental price bracket. We will probably sell some ( not all ) of our properties there ( not yet as I think the market hasn't reached it's peak , only about 50 % IMHO ) however if forsome reason we didn't do this , the properties we have are all ones I'd be happy to hold long term.

Rocky just keeps plodding along. It's not subject to wild fluctuations as much as some places , and in some respects that makes it a good place to invest in because it's relatively predictable.

I think that Townsville is a better long term prospect that Cairns ( and Rocky ) however you won't the returns in Townsville that some people are still able to get in Rocky and the returns when we bought were certainly better than in other Coastal Queensland towns.

BTW , we have one IP in Townsville , bought ealier this year. though no more plans to buy more as the return is borderline. Bought for long term growth

BBTW , I don't think much can be done to help Astro
See Change

 

[astroboy]

BBTW , I don't think much can be done to help Astro
See Change

Hey ! I ressemble that remark !!!
Onya SC, your predictions were pretty close.
Still don't like the place for investing tho, many other areas outstripped it in the period discussed here and I still think property there may prove difficult to offload in the future.
Each to their own

ab

 

[eiger]

So,
any suburbs in Rockhampton which are better to stay away from? Looking at properties the the centre, their returns are an average 2% to 5%, nothing to crow about. That can be achieved on the Gold Coast or Cairns. Those 8 - 10% do not show up on the websites with Rockhampton houses for sale. Even the PM's are saying there's not much around above 6% returns now in Rocky...hmmmm, looks like all the hot spots are goooone.

Bummer.

 

[Jacque]

So,
any suburbs in Rockhampton which are better to stay away from? Looking at properties the the centre, their returns are an average 2% to 5%, nothing to crow about. That can be achieved on the Gold Coast or Cairns. Those 8 - 10% do not show up on the websites with Rockhampton houses for sale. Even the PM's are saying there's not much around above 6% returns now in Rocky...hmmmm, looks like all the hot spots are goooone.

Bummer.

Eiger, you're wrong about there being nothing over 6%. You need to ring up more agents, subscribe to the local paper (Morning Bulletin), trawl the websites and, if you're really serious, do some walking and actually go visit to see what's around yourself. 7%+ returns are out there- but you need to do the work to find them. Don't forget that you can also buy something with a lower yield and spend some money to improve the rental return, whilst at the same time adding value to the property (which you can later draw down upon to reinvest!)

As for the less desirable suburbs, I'd steer clear of Depot Hill and invest in a council map of the city to locate the flood zones. (There are lots in Depot Hill and the Lakes District)
Good luck in your quest and let us know how you go!

 

[emcdonald]

eiger,

perhaps looking in an area like Gracemere (which is ten minutes from Rockhampton) may lead you to better yeilding properties. Jump on relestate.com and have a look at some of the three bedroom lowset brick houses for sale.Some come tennanted and most of them need little or no work needed. Gracemere has three primary schools, local shops, swimming pools and public transport via Youngs bus service into Rockhampton.
Anyway that's my two cents,

e x

 

[see_change]

Perhaps Eiger needs to look ..

I'm aware of someone recently who got 11 % return on a duplex.

6 -7 % is easy, and the " Central area " , assuming you mean Rockhampton City ( Kent St etc ) is one area that some people do stay away from. The other two "stay away" areas are Lakes Creek and Depot hill, though some people have done very well specifically targetting these areas. Horses for courses.

2-5 % , geee.

See Change

 

[see_change]

Just to reinforce the message Eiger.

I finally opened the latest issue of " Australian Property Investor " . The lead article is Chasing Positive Cash Flow .

and gee.... guess which are the first two places to rate a mention ... Rockhampton and Townsville ....

" For example a three bedroom house in Rockhampton may typically return an 8 % yield while Bundaberg is delivering yields of around 6.3 % . Equivalent properties in Brisbane have a yield of 4 % to 5 % ".

See Change

 

[ani]

Perhaps Eiger needs to look ..

I'm aware of someone recently who got 11 % return on a duplex.

6 -7 % is easy, and the " Central area " , assuming you mean Rockhampton City ( Kent St etc ) is one area that some people do stay away from. The other two "stay away" areas are Lakes Creek and Depot hill, though some people have done very well specifically targetting these areas. Horses for courses.

2-5 % , geee.

See Change

Not sure I agree with Lakes Creek being a "stay away" area, seech.

On what information is that based as my Lakes Creek property showed the best CG of all of them when I revalued?

cheers
ani