What's going on in Brisbane

[ricflair]

I bought in Wynnum mid 2013, I definitely think prices have risen because the houses on the 405 sq m are a great barometer as land value is fairly equal, the price is up about 50k-60k last 18 months.
And recently the stock seem to be selling much quicker if priced correctly but there has been lots of stock.
IMO Wynnum is looking good for 2016-17after the new Woolies library and some of the new high rises have gone in, I reckon the shopping strip will rejuvenate from the mass of empty shops there currently

 

[starter]

Where did you buy them and what type of properties were they?

Leo

Nothing too exciting, a house in Bracken Ridge and those basic 2 bed units in Alderley, Clayfield and Wooloowin.

 

[see_change]

I bought in Wynnum mid 2013, I definitely think prices have risen because the houses on the 405 sq m are a great barometer as land value is fairly equal, the price is up about 50k-60k last 18 months.
And recently the stock seem to be selling much quicker if priced correctly but there has been lots of stock.
IMO Wynnum is looking good for 2016-17after the new Woolies library and some of the new high rises have gone in, I reckon the shopping strip will rejuvenate from the mass of empty shops there currently

We bought three in Manly / Wynnum in mid late 2013 and prices seem to have gone up that 50 odd k , but that seemed to happen earlier this year . All the things we're buying recentyl have been done with a time frame of 10 years rather than shorter term trading

Cliff

 

[JDP1]

...I think some suburbs within 10km of the cbd have actually had a lot of growth in the last 6 month. ...

Yeah I too think so. The areas within 10km of the CBD have done well, nothing like their counterparts in Sydney and Melbourne, but decent steady growth. Im pretty sure there will continue to be moderate steady growth for these suburbs in the next 12 months.

 

[ricflair]

We bought three in Manly / Wynnum in mid late 2013 and prices seem to have gone up that 50 odd k , but that seemed to happen earlier this year . All the things we're buying recentyl have been done with a time frame of 10 years rather than shorter term trading

Cliff

Hopefully you're on the money Cliff, hope some good things happen, lots of developments are talked about going ahead at Manly and Wynnum central area, just everything someone proposes to demolish something or move a tree the old locals are up in arms about their Wynnum lifestyle being compromised. Anyway looks like things are happening just wish they would move the centrelink to Wynnum plaza.

 

[LeoT]

Yeah I too think so. The areas within 10km of the CBD have done well, nothing like their counterparts in Sydney and Melbourne, but decent steady growth. Im pretty sure there will continue to be moderate steady growth for these suburbs in the next 12 months.

Yeah I think the happiest investors would be the ones who bought a house (550k, decent land, scop to add value, about 6-9 months ago.

When you get into townhouses, IMHO you need to lengthen your expectations on CG for the Brisbane market. And for units.. well... IMO its not a market for units if you want great potential for CG in medium term.

Leo

 

[JDP1]

Yeah I think the happiest investors would be the ones who bought a house (550k, decent land, scop to add value, about 6-9 months ago.

When you get into townhouses, IMHO you need to lengthen your expectations on CG for the Brisbane market. And for units.. well... IMO its not a market for units if you want great potential for CG in medium term.

Leo

Definitely houses with plenty on land have done well, but well located townhouses with some land have also done well.
Apartments- there are [ founded or unfounded] fears of potential oversupply as there are many being built, so yes you will have to wait longer for CG in apartments.

 

[danwatto]

We bought three in Manly / Wynnum in mid late 2013 and prices seem to have gone up that 50 odd k , but that seemed to happen earlier this year . All the things we're buying recentyl have been done with a time frame of 10 years rather than shorter term trading

Cliff

It's a strange market, seemed very soft over the last month. Just bought in Manly for a significant discount off comparable sales which was unexpected. But it had been on the market a while though with motivation to get rid of it. I did see others in Wynnum in particular that wouldn't entertain our offers at all, i.e. Wynnum seemed stronger than Manly although the number of properties I looked at isn't statistically significant.

 

[danwatto]

When you get into townhouses, IMHO you need to lengthen your expectations on CG for the Brisbane market. And for units.. well... IMO its not a market for units if you want great potential for CG in medium term.

Leo

Townhouses in the south have an interesting history, we got some in Slacks creek and Meadowbrook for less than they paid 6 years ago . The vendors purchased for a much higher real$ price, plus stamp duty, and sold for a loss 6 years later... even worse with commission included, but no CGT obviously. Felt bad for them, but at the end of the day a short term play like that is a risk that they did take.

Over that period yield has increased to > 7% and vacancies are low, I believe the capital drops and flat periods have already happened in alot of townhouses - especially the ones that were purchased new that dropped the most after completion. People who purchased established townhouses didn't lose nearly as much as the ones who bought new.

 

[starter]

Yeah plenty of apartments coming up but they're more the bigger developments. The ones in small packs if bought at the right price will still see decent enough CG.

 

[LeoT]

Yeah plenty of apartments coming up but they're more the bigger developments. .

Hi starter, I agree with you re bigger unit developments coming on the market and there seems to be 'investors' who jump at it every time.


For the life of me I cant understand why 'investors' would buy a unit with a massive strata in high-rise bloc.

99.9999999999999999999999999999% of the time these are BAD investments. BAD BAD BAD BAD BAD..

Some ppl tend to think, ,"oh no... you cant say that.. there's no such thing as a 'bad investment'.. different things suit different ppl", they say.

That's the biggest load of BS and its a delusion of people who have that attitude.

Leo

 

[Redom]

Hi starter, I agree with you re bigger unit developments coming on the market and there seems to be 'investors' who jump at it every time.


For the life of me I cant understand why 'investors' would buy a unit with a massive strata in high-rise bloc.

99.9999999999999999999999999999% of the time these are BAD investments. BAD BAD BAD BAD BAD..

Some ppl tend to think, ,"oh no... you cant say that.. there's no such thing as a 'bad investment'.. different things suit different ppl", they say.

That's the biggest load of BS and its a delusion of people who have that attitude.

Leo

Leo do you mind drilling into why you view it as a bad investment?

Is it just a supply side issue?

Do you think this type of accomodation has demand issues in Brissy?

Cheers,
Redom

 

[LeoT]

Leo do you mind drilling into why you view it as a bad investment?

Is it just a supply side issue?

Do you think this type of accomodation has demand issues in Brissy?

Cheers,
Redom

HI redom,

here are only a few reasons why I strong believe high rise, massive complexes are a bad investment for ANY market, state, city.

1. When you want to rent yours, your competing with hundreds and hundreds of similar units in the complex/es. If some ppl decide to rent under market value (as often happens) then you will have to lower your asking amount or wait a long time.
2. If some silly person sells their unit under market valuers price (as also often happens) and you want a revaluation on your unit to extract equity, the valuers will first look at sales in your building. Their low sale price will DIRECTLY affect the value of your unit. If 2 or 3 ppl sell under market value in the complex of hundreds, then its adieus amigos.
3. 8k plus strata for investors a year is an unnecessary drain on CF. And when these strata increase, it only gets worse.
4. Too much supply, greatly dampens CG.


Need I go on?

leo

 

[Redom]

HI redom,

here are only a few reasons why I strong believe high rise, massive complexes are a bad investment for ANY market, state, city.

1. When you want to rent yours, your competing with hundreds and hundreds of similar units in the complex/es. If some ppl decide to rent under market value (as often happens) then you will have to lower your asking amount or wait a long time.
2. If some silly person sells their unit under market valuers price (as also often happens) and you want a revaluation on your unit to extract equity, the valuers will first look at sales in your building. Their low sale price will DIRECTLY affect the value of your unit. If 2 or 3 ppl sell under market value in the complex of hundreds, then its adieus amigos.
3. 8k plus strata for investors a year is an unnecessary drain on CF. And when these strata increase, it only gets worse.
4. Too much supply, greatly dampens CG.


Need I go on?

leo

Haha thanks Leo - i guess i was after your views on specific Brisbane factors, rather than units as investments. Any intel there?

 

[LeoT]

Haha thanks Leo - i guess i was after your views on specific Brisbane factors, rather than units as investments. Any intel there?

Hi Redom,

I am not sure what ur asking mate. You quoted my comments and then asked why they make bad investments..hehe so I naturally assumed were talking about high rise complexes..

Personally I don't think they are good investments for any state, city, market. But im not sure what your asking mate.

Leo

 

[Redom]

Hi Redom,

I am not sure what ur asking mate. You quoted my comments and then asked why they make bad investments..hehe so I naturally assumed were talking about high rise complexes..

Personally I don't think they are good investments for any state, city, market. But im not sure what your asking mate.

Leo

I did mate, sorry, i misread your earlier post. Fair call, those reasons do make a lot of sense. As always, thanks for sharing!

Just to add some growth numbers to the picture: unit price growth has outstripped house price growth in Brissy over the last 10 years (just, 3.7 v 3.5%). In Sydney, its 3.8% p.a. for both units and houses. Melbournes about a 1% difference between houses and units. (Source RpData)

Those factors you mentioned are all structural (except the supply)...they would've existed for the last ten years - yet the growth story has been pretty similar between units and houses.

Nonetheless, some of the factors you mentioned about valuations is definitely true and need to be considered.

I guess i'm trying to get a clearer picture (from you or anyone else) - as to what will hold back capital growth in UNITS in Brissy relative to HOUSES. I know there's subsets within markets (e.g. brissys 500k + market is tipped to go well by my reading of SS).


Cheers,
Redom

 

[sumterrence]

I did mate, sorry, i misread your earlier post. Fair call, those reasons do make a lot of sense. As always, thanks for sharing!

Just to add some growth numbers to the picture: unit price growth has outstripped house price growth in Brissy over the last 10 years (just, 3.7 v 3.5%). In Sydney, its 3.8% p.a. for both units and houses. Melbournes about a 1% difference between houses and units. (Source RpData)

Those factors you mentioned are all structural (except the supply)...they would've existed for the last ten years - yet the growth story has been pretty similar between units and houses.

Nonetheless, some of the factors you mentioned about valuations is definitely true and need to be considered.

I guess i'm trying to get a clearer picture (from you or anyone else) - as to what will hold back capital growth in UNITS in Brissy relative to HOUSES. I know there's subsets within markets (e.g. brissys 500k + market is tipped to go well by my reading of SS).


Cheers,
Redom

From what I can remember back in my research days in 2007, units WERE the golden child according to my analysis, they present great CF plus their CG is almost 100% within 2 years during that time period, I've read plenty of stories how people bought a unit in brissy for 200k and it valued at 400k after two years.

And Back at those times houses doesn't seems as lucrative as units, median house price in Sydney were in the 300k-600k mark, with rental income almost same as those 150k-300k units, I still remember telling my family how my strategy is going to acquire plenty of cheap Sydney units in the least desirable areas (Liverpool/Penrith/Lidcombe etc).

But the game has since changed after all these crazy Chinese start buying THE WHOLE BLOODY BLOCK of units.....................and units in my eyes now are least desirable compare to houses.................

 

[LeoT]

I did mate, sorry, i misread your earlier post. Fair call, those reasons do make a lot of sense. As always, thanks for sharing!

Just to add some growth numbers to the picture: unit price growth has outstripped house price growth in Brissy over the last 10 years (just, 3.7 v 3.5%). In Sydney, its 3.8% p.a. for both units and houses. Melbournes about a 1% difference between houses and units. (Source RpData) yes but I am not saying units are a bad investment. I am making a specific reference to 'massive complex' units. I am not talking about other unit building. There is a big difference


Those factors you mentioned are all structural (except the supply)...they would've existed for the last ten years - yet the growth story has been pretty similar between units and houses. Again I am talking about units in massive complexes with high strata. Not ALL unit markets. Big difference. The data is assuming ALL units are included. I highly suspect that if you take units ONLY in massive complexes of hundreds and hundreds, and compared their growth to houses...would be a very different story. We need to compare apples with apples.

Nonetheless, some of the factors you mentioned about valuations is definitely true and need to be considered.

I guess i'm trying to get a clearer picture (from you or anyone else) - as to what will hold back capital growth in UNITS in Brissy relative to HOUSES. I know there's subsets within markets (e.g. brissys 500k + market is tipped to go well by my reading of SS). I believe there is just simply more demand for houses in Brissy. Will units grow? Of course. Will they grow as much and as fast as houses ? I don't think so. Not in Brissy. Just my opinion though. Yes of course there are exceptions. I'm talking about generally.

Cheers,
Redom[/QUOTE

 

[willair]

http://www.brisbane-apartment.com/

 

[Redom]

Great info - thanks all.

I agree with you LeoT, not sure purchasing massive highrises is ever a good idea - your reasons make sense and seems to be consensus view.

Sumterrance - makes sense, the data over 5 years isnt as pretty. Over ten years its much better.

Cheers,
Redom