Rocky , The next Big Thing ??

We've just bought in Rocky

We are due to settle any day on a duplex. I've been keeping an eye on Rocky all year, and it still seems hot to me - particularly the duplex and unit market. We got a duplex with 8.5 % rental return, which isn't as good as we would have gotten earlier in the year, but still pretty good. So, I guess thats an indication of the price rises there. It's getting harder and harder to get anything with that level of return.

I think for Rocky, capital growth is the icing on the cake. The real benefit of buying there is the rental return and the low vacancy rates. It allows you to pay off the mortgage much more than a high capital growth property in Sydney.

but i also think as more and more people (particularly southern investors) are looking for better rental returns they'll go to places like Rocky to get out of the negatively geared market, and that will keep pushing prices up there for a while yet.

Brains, has you friend actually had his properties revalued. It may be that he's not so aware of the price rises, since he doesnt really care about whats happening so much. And I think you're right - there's no reason to be that worried getting such a good rental return. Which is exactly the reason we have bought there. Although I wish I could have bought in February, to get those 10%+ returns!

Penny
 
Go here, type in 4700 and look at the results. (It uses Residex)

http://www.aussiehomeloans.com.au/Content.asp?ContentID=120224

Pretty average compared to the rest of QLD. Taking the middle ground, they have gone from $81k to $97k in 4 years....WOOHOO!!!

And look at the result for the bottom 25% price range for 2002 - 2003!!


Now type in 4700 here:

http://www.homepriceguide.com.au/snapshot/price/index.cfm?action=view&source=apm&cb=1203075850

Beside that i have a QLD Residex report for property price rises between 1991 and 2001 and it shows cap. growth for 4700 of -0.74% pa for the last 10 years and about 7% for 2001.


I cant get the following site to send me a report by email, can you guys try it and report back? Thanks.


http://www.residex.com.au/index.php...ot&PHPSESSID=4dfdc2cb9531f828a27f6cc0b74a794d
 
Originally posted by brains
Go here, type in 4700 and look at the results. (It uses Residex)
http://www.aussiehomeloans.com.au
Click to expand...

Brains,

The figures I get are as follows:

Aussie Valuer results for houses in postcode 4700

Top 25%
2003, $ 129,500
2002, $ 134,125
2001, $ 119,500
2000, $ 97,862
1999, $ 133,000


Middle 50%
2003, $ 97,000
2002, $ 96,000
2001, $ 85,000
2000, $ 77,000
1999, $ 81,250


Bottom 25%
2003, $ 72,250
2002, $ 70,000
2001, $ 65,000
2000, $ 53,375
1999, $ 60,250


Note on Rental Rates
--------------------
Rental rate is 7.84% per annum (median rental return expressed as a percentage of the amounts above).

Understanding This Data
-----------------------
The figures below shows the median property prices in the postcode and dwelling type you selected. The information is split into three groups: properties in the top 25% of the market by value, the middle 50% of the market by value and the bottom 25% of the market by value. eg. Generally speaking, the best house in the street is in the Top 25% and the 'renovate or detonate' property is in the bottom 25%.

Source: 'Aussie Valuer' - http://www.aussiehomeloans.com.au



Ahh - so, Brains, your knowledgeable friend is John Symonds :D

And the font of all knowledge are Residex.

I've known them to get it wrong....and no-one has claimed that Rocky was booming over the last 4 years - SC used 20 year figures to explain his point and has talked about the downturn over recent years - try reading his posts more carefully Brains :)

I'd like to note that the last commentary from John was as follows:

No “Property Bust" on horizon
http://www.aussiehomeloans.com.au/Content.asp?ContentID=341321

Weren't you expecting a bust Brains?

Cheers,

Aceyducey
 
The figures have nothing to do with Aussie Homeloans or John Symonds. They come from Residex.

I saw John Symonds on tele being interviewed and saying there will be no bust. He would say that just as anyone who has a reason to not see a bust, hes just talking the market up.

You forgot to mention the Homepriceguide figures Acey or is that selective omission?


You will see 0% growth for Rockhampton over the last 12 months.
Even if thats wrong, id bet it wouldnt be much higher and I still say Rockys a dud.

Ever heard the saying that a long term investment is a short term one thats gone bad, that could apply to Rocky for buyers who bought in the last year.

One more thing, if 8-9% gross yields are still acheivable in Rocky at this stage of the game, what does that tell you. Even 2 people and a dog towns (or pop. of less than 2000) in regional NSW have yields at 5-6% now due to price rises in this recent boom.
 
Originally posted by brains
You forgot to mention the Homepriceguide figures Acey or is that selective omission?

You will see 0% growth for Rockhampton over the last 12 months.
Even if thats wrong, id bet it wouldnt be much higher and I still say Rockys a dud.
Click to expand...

Overlooked - you can post them Brains, simply copy & paste :)

Why are you so down on Rockhampton Brains? It doesn't seem to come from an objective perspective - if so you'd be down on a lot of other places as well?

Is this merely a deliberate attempts to be contrarian - regardless of the facts of the matter? You'll predict a dud even though the future hasn't happened yet?

cheers,

Aceyducey
 
As a new poster to the forums I hope to learn from the vast experience of the many people from varying walks of life who have become successful at what they do

I do however find it hard to accept that people can belittle each other for differing opinions and would much prefer to see positive posts that especially for new members are much more constructive and informative.
:)
 
Well - this has turned into a heated thread since last I looked. Brains, although I have no doubt that you are playing the devil's advocate I just can't help making some somments.

Residex - I do not find that Residex or any other stats mean a whole lot. I am sure that you (Brains) and many others in this forum have made fantastic capital gains in the past year or 2 and the residex and other stats do not even come close to the gains actually made.

Past Growth - What has past growth got to do with future growth? Fund managers use this argument regularly and a lot of people expecting similar returns to the year before have been terribly dissapointed. Also, if there has been a lot of past growth then isn't that telling you that you have missed the boat (Captial City craziness excluded). The whole point of investing in a place like Rocky is that it has not had a lot of growth as yet and the value of properties is so low that it needs to catch up.

Investors
Some people say that the interest rate rises will cause either a bust or at the least stagnate prices. I agree with this statement for capital cities such as Sydney and Melbourne, but not so in large country towns. The price increases over the years have pushed the rental yeilds down to record lows such as 3% in Sydney. People are now accepting that there is no real money to be made in captial growth (specialised properties and Brisbane excluded). Unless investors decide just to pack up and leave the market (unlikely given that many have already moved from the share market) then an investor will have to shift focuss from capital gain to yields. Property with yields such as 8-12% are still vailable in some country towns such as Rocky. Having said this I can not imagine yields like this being available in a few years. People in the past have accepted 5% yields using tax incentives as postively geared properties. My belief is that the southern investors chasing yields will in time push prices up in non-capital cities such as Rocky. This has already happened in many major towns in NSW and the move by investors appears to be heading north. Try buying a property in Orange NSW these days with yields of more than 5%. I believe that market in places such as Rocky will also move to 5% over time.

Rocky Comments
It is a larger than most non-capital City. The prices are dramaticly lower than similar size non-capital cities. What possible reason is there for the difference. I can already hear the Statistic experts screaming vacancy rates, employment, population etc. My answer to this is so what. The fact is that Rocky is not dramaticly different to any other non-capital city when it comes to economic data. How can a similar property in another town such as Gladstone or Mackay be worth 50% more? Is anyone seriously trying to argue that people in these towns never move. If it costs so much less in a nearby town then people will move there. The market will always level prices out over time. For a dramatic difference between Rocky and say Gladstone property prices to remain so for any extended period of time, you would have to build a wall around Rocky and require a resident statis to purchase property there. It is a non-sense to say that the prices will not level out over time. An example of this is Prosperpine. Airlie Beach (20minutes away) has experienced a boom. People living in Airlie Beach can no longer afford to live and rent there. So, as leases expire, people are looking to live in Proserpine. For some time now the prices in Properpine have been steadily rising, and will at some time in the future (probably several more years) level out to being about 20% lower Airlie Beach. The 20% (guess guess) is for cost of convenience.


Most of my best investment decisions over the years have been when I take an alternative move from the rest. I bought a lot of property between 1997 and 1999 in Canberra at a time when everyone said I was mad. They said I was mad because the statistics in Canberra showed no growth since 1991. I replied at the time that this was great as it was likley that the market would correct itself given that it was stagnant for more than 7 years. History always settles the argument.

I will take a punt that Brains has bought an investment unit (s) in Sydney or Melbourne in the last 12 months, not that I am saying this is a bad thing, but Brains' comments appear to fit the comments of a conservative investor who follows the general consensus. (No offence intended)

The comments above from Brains make me want to head for Rocky to buy more investments properties.

Brains - please feel free to attack - I love a good argument.
 
Hi to Rocky/Capricorn Investors,

Since my last post in mid 2003, re: Yeppoon Emu Park, values have obviously moved up in the right direction. The whole movement in prices on the Rocky/Capricorn Coast is catch up with the rest of the Eastern Aussy Coast and nothing to do with employment or the past job losses.

Where I live on the North NSW Coast employment opportunities are almost nil for the unskilled, but that did not stop land from tripling in value in the last 2 years. The bottom line is sun, surf, sand, Climate & future lifestyle (workers looking to retirement lifestyle), driving the beach villages and adjacent cities to boom conditions. Yeppoon and Emu Park are lifestyle towns with everything nearby in Rocky.

Our investment on the Capricorn coast has certainly been a sure winner. Beats leaving money in bank.

If anyone knows of current cheap beach land anywhere on the east coast of Australia within 200 m of the beach, under $45,000 ,please let us know & we will take a weekend trip.

Coast
 
Rocky

I bought a great house in Rocky which only settled a couple of months back and payed less than the previous owners paid ten yrs ago?.
It also came with a tenant and does not flood.
The house cost $65,000 and rents for $130.
I never listen to astroboy types if I had I would never have made a cent, in fact it lifts my confidence even more, I bought in Logan when everyone was saying don`t buy there it a low income violent area, 8 months later it was double, and you could physically see what they were saying and why they would say it!.
 
To Coast....beachfront land.

Sorry about that last terse post but I wrote a couple of longer ones and couldn't post them.

As for beachfront land, there is a bit in the North but not the classic beaches of the south. Search Forrest Beach out of Ingham. Doubt it would be much more than the budget you mentioned.

Thommo.
 
Thommo

Most people who have bought up in Rocky would agree with your sentiments :)

If I had the choice of where to live I'd pick Yeppoon or Emu park over rockhampton any day.

But I'm not buying somewhere to live. I'm buying somewhere that other want to live and I can invest . Low Vacancies rates confirm that Rocky is somewhere people like to live. When I checked it out vacancy rates were higher in Yepoon.

Yepoon has doubled in the last couple of years, Rocky is cheaper and you can get good returns.

Rocky has better infrastructure , schools , shops etc. It's also where more of the jobs are.

See Change
 
Hi All

I also agree with SC. Capital gain at Yepoon with prices increasing and more and more units being built does not necessarily mean that the vacancy rate will be low. If anything, it will mean that you will have trouble finding a tenant due to the number of developers looking for those capital gains.

Long term investment in property should be based on returns, not the prospect (no more than a gamble) of future capital gains. If you end up with capital gain think of it as a bonus. In any event, a paper capital gain now will be wittled away over the years if you have a high vacancy rate. Sure, if you are after a quick buck then everything I have said is irrelevant. AND, I do not know too many investors who buy and sell short term. Real estate is generally a long long long term investment.
 
I just checked the QLD regional stats. Overall, QLD is the fastest growing state in the entire Australia, in terms of population, almost every single part of QLD is sucking in intra-state and international migrants like crazy, with the exception of a few places, Rockhampton included. In fact, Rockhampton recorded the biggest drop of population in entire QLD (-240 in one year).

http://www.abs.gov.au/Ausstats/[email protected]

While QLD as a whole recorded a growth of population of 8.5% from 1996-2001, Rocky recorded a drop of 2.3%. Is this trend reversible?
 
Lilth

Earlier on in this post there were stats posted , which , according to my interpretation , predicted that Rocky was expected to grow , and is in a growing area.

Have a look there.

See Change
 
see_change,

I did go through the thread, thanks.

Perhaps I missed it, but I didn't see any basis for the projection of future growth in population. What fundamentals have changed since 2002 to indicate that the drop in population will be reversed?

It'll be interesting to know why people left Rocky in the past while the whole QLD had such a spectacular growth.

Thanks.
 
Hi Lilith

The figures that astroboy quoted were from the Queensland Government Office of Economic and Statistical Research.

I am prepared to accept their estimations as they have expertise available at their disposal which I don't .

It's quoted on page two of the post, and my comments are on page three.

See Change
 
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