Too late for Toowoomba?

M

Magnet

Hi
Long time lurker! I love this forum and consider all the information I've gained so far to be invaluable.

We are finally in a position to buy a 2nd IP and have our sights set on QLD. Funds are limited to the $200,000 to $300,000 range. We are very interested in Toowoomba and had read a few market commentaries that mentioned there was around 6 months left to get into this market before it was too late. That 6 month time period would be up about now. So what do those on the ground and current Toowoomba investors think - are we too late?

Our strategy is cash flow positive properties for buy and hold for long term capital gain. We would love some early capital gain so we can buy again in the shorter term.
 
Magnet said:
Hi
Long time lurker! I love this forum and consider all the information I've gained so far to be invaluable.

We are finally in a position to buy a 2nd IP and have our sights set on QLD. Funds are limited to the $200,000 to $300,000 range. We are very interested in Toowoomba and had read a few market commentaries that mentioned there was around 6 months left to get into this market before it was too late. That 6 month time period would be up about now. So what do those on the ground and current Toowoomba investors think - are we too late?

Our strategy is cash flow positive properties for buy and hold for long term capital gain. We would love some early capital gain so we can buy again in the shorter term.
Click to expand...

Why do you think that Toowoomba is a good place to invest?
 
thanks for your replies Coota & Norwoodman.
We would be looking at an older 3 bed on a 500m2+ block for a house or a 3 bed townhouse. It will be a struggle to find stock at our price point but we are hoping to squeeze into Newtown, Harristown, Wilsonton or Rockville.

There are heaps of things we like about Toowoomba from the preliminary research we've done. Diverse economy; mining influenced but not reliant, low vacancy rate - 3.7% for the Region; good rental return - positive cashflow opportunities; lots of great infrastructure currently(several hospitals, lots of schools, Uni/Tafe) with a lot more in the pipeline such as shopping centre upgrades - Grand Central, Garden Town & Library, the New Airport (will be interesting...), new rail lines, an active Council that appears to be planning ahead for population growth projections, extremely low unemployment rate. What's not to like about Toowoomba ;)
It has historically had steady growth in the long term but just hoping we haven't missed the boat for some short term gains so we can rinse and repeat somewhere else.....like Frankston:eek:
 
Magnet said:
Hi
Long time lurker! I love this forum and consider all the information I've gained so far to be invaluable.

We are finally in a position to buy a 2nd IP and have our sights set on QLD. Funds are limited to the $200,000 to $300,000 range. We are very interested in Toowoomba and had read a few market commentaries that mentioned there was around 6 months left to get into this market before it was too late. That 6 month time period would be up about now. So what do those on the ground and current Toowoomba investors think - are we too late?

Our strategy is cash flow positive properties for buy and hold for long term capital gain. We would love some early capital gain so we can buy again in the shorter term.
Click to expand...

Who was saying 6 months (well 0 months) left out of curiosity?
 
We stopped buying for our clients in Toowoomba at the end of 2013.

Not saying there isn't further upside in the future but the rental returns haven't kept pace with the increase in prices.

Talking to a couple of the valuers up there they believe it will kick again but might see some downside between now and then.

Certainly this is coming back in some of the valuations we are receiving for forum members.
 
Blueberry, the first commentary I heard was on a Your Money, your call podcast around February & I can't recall the others I read but this is one from Nov Property Observer;

"In the short term, Dr Wilson has seen an acceleration in activity in Toowoomba, and believes it will remain as Queensland?s strongest-growing region in the following months to come.

Ray White Toowoomba principal Andrew Carter thinks Toowoomba?s property market is at the beginning of its recovery.

"We?re at the start of an upwind; we?ve been recovering quite quickly on sales volumes. The number of sales have now recovered to long-term averages," he told Property Observer.

He noted that property prices are starting to trend upwards. This could be due to a new town plan being put in place in that encourages infill development, which has had significant impact on land valuation in certain zonings.

While Toowoomba has often been compared to Gladstone, Carter thinks the two are vastly different.

"Toowoomba is the largest inland city. Gladstone is much smaller than Toowoomba. Traditionally, Toowoomba has been supported by the agricultural industry which is still there. All that?s happened adds another dimension to the commercial spots of Toowoomba as a centre," he said.

Toowoomba?s vacancy rate was 1.3% as of September?s end, but Carter emphasises that the area has historically had a low vacancy rate.

"We haven?t necessarily had surging rents like you would expect. We haven?t seen circumstances where there is bidding for property where people have to pay significantly above the asking rent in order to secure the property," he said.

From a commercial perspective, Carter thinks Toowoomba still needs some population growth and optimism.

In addition, Carter does not think Toowoomba has reached a point of oversupply."

Thanks for the info Qlds007, appreciate the feedback from someone living & breathing the local property market.
 
We bought an IP in Toowoomba early 2012 - and very happy so far... There are building sites everywhere (both renos and unit/townhouse developments)... a lot of activity... Hopefully going to Boom :)
 
There was a lot of developments in gladstone too. A great sign oversupply is coming.

A lot of company's will be providing temp accommodation camps for employees while the 2nd range crossing is constructed.

Bit of a bubble forming I suspect. Of course REA'S are going to hype up the market. They want sales.

James
 
jameso said:
There was a lot of developments in gladstone too. A great sign oversupply is coming.

A lot of company's will be providing temp accommodation camps for employees while the 2nd range crossing is constructed.

Bit of a bubble forming I suspect. Of course REA'S are going to hype up the market. They want sales.

James
Click to expand...

Errr.......what?
 
I've been looking around Toowoomba recently. First looks were around June. I then left the town for a while and on my return ( two weeks ago), I sensed that property values have been pushing up by about $10k just about every week. Or so it seems to me.

I've inspected several properties and made offers. The feedback is that most sellers get what they ask for, so don't bother offering less than the tagged price if you are serious about the property.

The Matusik June 2014 report indicates that Toowoomba is on the recovery part of the property cycle and has potential for further growth between now and 2016. It is expected to see subdued price growth thereafter.

Speaking with RE agents, the rental vacancy rate is around 1.2%.

The fastest selling properties are those under $400k ( that seems to be Matusik's magic top level number in a few of the reports I've read recently). There are fewer of those by now and more that are in the $420K plus and these seem to be increasing by the day. Those that are in the lower $300K mark are mostly very much older houses that will need plenty of work to either refurbish or maintain in the long run. I own a timber home and it's an ongoing maintenance issue. A bit like owning a boat, I hear :)

RE agents say that the market is currently heavily driven by investors.

I am beginning to wonder if I shouldn't invest in metro Brisbane instead. In the long run, I expect it won't suffer from the 'flash in the pan' syndrome that I suspect Toowoomba is suffering from before it starts stagnating again.
 
Last edited:
I'd like to correct Matusik's property clock for Toowoomba. Toowoomba is now in upswing if my senses are correct.

Upswing being defined by:
  • Fast sales
  • Strong price growth
  • Steady yields
  • Sellers market
  • Over supply (maybe not yet on this score)
 
We have been doing conveyancing on a lot of toowoomba duplexes in the last couple of months. Didn't see much there last year.
 
RPI said:
We have been doing conveyancing on a lot of toowoomba duplexes in the last couple of months. Didn't see much there last year.
Click to expand...

I noticed a lot of duplexes being built around the established parts of Toowoomba when I was back in April. H&L development through Toowoomba still seems to be fairly limited to the Cotswold Hills, Glenvale and Kearneys Spring areas.
 
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