It all depends on time held and risk appetite. The same thing can be said about shares ie blue chip vs non blue chip shares...
Long term, generally yes. Short term, most likely not.
Sydney Market at top - calling a severe correction in 2018-2019
- Thread starter sash
- Start date
It all depends on time held and risk appetite. The same thing can be said about shares ie blue chip vs non blue chip shares...
Long term, generally yes. Short term, most likely not.
Yeah fair point...I'll agree with that.
people confuse blue chip with nice places to live. In 2006 or so when I was promoting Karratha and was greeted with indifference (think it was this forum, may have been another), the new house and land packages were $300k. Their values went to $1m and were rented at $2000pw at peak. Recently they have dropped down to about $600-700k. Risky non-blue chip properties!
lol.
For the defn refer Deltaberry's initial post on the subject. I.e. aspect, street, access ... Nothing to do with blue chip. Cld be a dump too I reckon.
"I have no recollection, yer Honour!"
Sanj,
It is obvious to everyone what your intentions were.
Quite funny...
backpedal. backpedal, backpedal..
Last edited:
Why would you not find a blue chip in a place like Kalgoorlie? There are properties there which are terrific and everyone would love to own them...good demand from purchasers and future CG.
What is the criteria for "blue chip" though?
I've always thought of it as:
1. well located - street, suburb, streetscape, closeness to amenities, transport, employment, etc
2. good floor plan
3. quality of build
4. prospects for CG.
5. rent yield.
Are there any others?
You could possibly add depreciation and/or ability to subdiv and/or reno for value add - but I suspect these factors constitute it being more an A grade rather than blue chip?
The only problem I've seen with the above list is no.5 - often a blue chip area has terrible yields - say; Hawthorn, or Brighton, for eg.
"I have no recollection, yer Honour!"
Sanj,
It is obvious to everyone what your intentions were.
Quite funny...
backpedal. backpedal, backpedal..
I've said all I'm going to say on this. You can either believe me or keep playing the victim. Either way I'm sure no one wants to read this nonsense.
Well, I and others don't believe you, and I'm not playing the victim.
I've got bigger worries than to be upset by your childish snipes at me.
You've been exposed dude; I have known it for ages, but it doesn't worry me.
It was picked up by another poster; that's how obvious you've become.
How about you add some meaningful content to the thread - or even to the theories of A grade and blue chip?
I brought the point up initially with Deltaberry, to promote some discussion about the selection criteria and mindset surrounding selection criteria to help the newbies here who are trying to learn.
Last edited:
Appeared to me you were having a shot
Back on topic, what do other people consider to be A grade?
I was prompted to ask the question because I don't personally feel that your run of the mill homes can be considered A grade, it needs to be something difficult to obtain and in rare supply.
Say a tightly held cbd land holding if commercial or a prime terrace on a good street, perhaps the corner one.
I'm kalgoorlie it might be the exchange hotel (although from memory it keeps going broke ) or the supermarket site everyone goes to. In perth it might be a renovated character home on money st.
I don't believe BVs Kal example was A grade which is what started the whole discussion. It's not a diss, I wouldn't consider anything I own atm to be A grade either but my definition could be different.
Does investment performance come into it when discussing if A grade or B grade?
I was prompted to ask the question because I don't personally feel that your run of the mill homes can be considered A grade, it needs to be something difficult to obtain and in rare supply.
Say a tightly held cbd land holding if commercial or a prime terrace on a good street, perhaps the corner one.
I'm kalgoorlie it might be the exchange hotel (although from memory it keeps going broke ) or the supermarket site everyone goes to. In perth it might be a renovated character home on money st.
I don't believe BVs Kal example was A grade which is what started the whole discussion. It's not a diss, I wouldn't consider anything I own atm to be A grade either but my definition could be different.
Does investment performance come into it when discussing if A grade or B grade?
Where's Geoff when you need him? The humour level of this thread needs to be ramped up!
And people keep talking about grades when they say they are getting back on topic, which isn't actually the topic of this thread. Perhaps that whole discussion should be moved to a new thread?
On the grade topic (I have NFI about Sydney), I've never heard of any resi property being described of as A or B or C grade.
Those terms belong to the CIP market and relate to building quality, as a proxy for investment quality. The Property Council of Australia helpfully publishes a large booklet to help people understand the grading system here:
http://www.propertyoz.com.au/Bookshop/Book.aspx?p=52&book=2
It will cost you a bit to download though...
Real Estate Agents for industrial properties also use the term "A Grade" but it's usually never about the property but more an indication of the investment quality of the lease/lessee.
And people keep talking about grades when they say they are getting back on topic, which isn't actually the topic of this thread. Perhaps that whole discussion should be moved to a new thread?
On the grade topic (I have NFI about Sydney), I've never heard of any resi property being described of as A or B or C grade.
Those terms belong to the CIP market and relate to building quality, as a proxy for investment quality. The Property Council of Australia helpfully publishes a large booklet to help people understand the grading system here:
http://www.propertyoz.com.au/Bookshop/Book.aspx?p=52&book=2
It will cost you a bit to download though...
Real Estate Agents for industrial properties also use the term "A Grade" but it's usually never about the property but more an indication of the investment quality of the lease/lessee.
I would have thought the criteria for "blue chip" property would be much more about the location rather than the property and would include :
- consistently in high demand.
- long record of stable growth.
- weathers downturns well.
- lots of potential buyers from many different markets.
- aspirational purchase for many buyers.
That is why I ruled out Kalgoorlie - to me it is a bit like saying "why can't a small cap be a blue chip company " ? I'm sure your results have been good - but I don't think the demand for them is consistent - timing (buy & sell) is really important in tregional areas.
It doesn't mean that the only good investments are "blue chip" ones.
There does not seem to be a lot of "blue chip" investors on SS.
I've got one, maybe two that I'd consider blue chip and they are the ones that have delivered the best results for CG.
So, you are saying blue chip is more about a region; say Cap cities, rather than a particular property style in a particular suburb and/or street/s?
We had a unit in Highett some years ago; twenty year old 2x1 villa in a complex of 12; near shops, station etc.
We were looking to sell it, and one of my mates asked about it for a possible purchase for his SIL.
When he saw it, he said; "We are looking for something a bit more "blue chip".
I read from this statement that they were happy with the suburb, but his version of blue chip was more the property type; it turned out that they were looking more for a newish townhouse style..
Good luck with that one, I have observed that when markets crash blue chip also crash, just fall harder.
I am pretty sure Syd blue chip fell considerably in last boom/bust cycle. Blue chip in Perth has not recovered since 2007.
Similar scenario to Melb last boom cycle.
It's a fallacy, promoted by the property spruikers, let's face it means they don't have to work too hard.
Mtr
