Zillmere or Bracken ridge

[DaveS]

Hey guys, looking to buy my first IP in Brisbane's northern suburbs and thought I'd get a few opinions on these two suburbs. Each suburb has it's own pros and cons ie: Zillmere - has it's own railway station, only 12km from the city, plenty of schools nearby but stock is generally older and has a higher vacancy rate (houses) where as Bracken Ridge - newer stock, lower vacancy rate (houses) slightly higher weekly rental return than Zillmere but no railway station, 19km from city, not as many schools etc.
If you allowed to spend the same amount in either suburb which one would you choose and why?

 

[snowwhite]

Of course there is a rail way station in Bracken ridge ,I bought my IP at Bracken ridge ,only 4 mins walk to the station,the station is called bald hills ,just right behind Bracken ridge .

My IP is cash positive since the day one , and it's on a 800 Sqm lot . Only took one day to rent it out ,the agency even did not advertise for it ,as they've got lots of people looking for rent in that area.

 

[Nth Brisbanite]

I'd prefer Zillmere for future growth even though it has a lot of older houses and government owned property with all the problems that come with it. As the older houses are demolished or renovated & government properties are sold to private owners, the area will become more popular with middle class and younger families. Zillmere has a railway station and is close to all facilities such as good schools, shopping and transport.

Bracken Ridge has some great pockets of housing but is about 5 kms further out from the CBD than Zillmere. I agree that some of Bracken Ridge is close to Bald Hills station but other parts are a fair distance to rail. Bracken Ridge does not have the same opportunities to grow as Zillmere as the housing there is fairly new.

 

[Andrew_A]

Hey guys, looking to buy my first IP in Brisbane's northern suburbs and thought I'd get a few opinions on these two suburbs. Each suburb has it's own pros and cons ie: Zillmere - has it's own railway station, only 12km from the city, plenty of schools nearby but stock is generally older and has a higher vacancy rate (houses) where as Bracken Ridge - newer stock, lower vacancy rate (houses) slightly higher weekly rental return than Zillmere but no railway station, 19km from city, not as many schools etc.
If you allowed to spend the same amount in either suburb which one would you choose and why?

Depends.

There's a lot to consider with a $ for $ comparison, what type of property and in what condition returning what yield? What budget for the purchase? The specifics of the particular property you buy would be more important than the difference in these two suburbs over the longer run I would say as well.

Some nicer pockets in both suburbs. I'm a big fan of train stations and close to the CBD is still a plus everything else being equal, having said that I don't like the way Zillmere is developing, a lot of developers cramming townhouses on smaller blocks right up to the boundary, also there aren't many barriers to entry, there's a lot of LMR zoning with precious little incentive or demolition control to keep and renovate significant houses. The train station has also had it's issues in the past, just have a chat with the local shop owners to get the latest information, having said that I definitely wouldn't discount the area as it's also very affordable. Those lovely 'clubs' that help investors buy over priced new stock love Zillmere as well Would almost be definitely thinking house for both suburbs though.

Bracken Ridge is a large suburb geographically, some of the newer estates are particularly nice with a strong owner occupier ratio and a good spread of prices, not all clustered around the same price point. Not as close to the CBD and likely smaller blocks as well, again.. it really depends greatly on what numbers you can find with an individual deal as the longer the time frame the more the two suburbs are likely to perform in a similar fashion I would estimate.

 

[JoB]

Zillmere - has it's own railway station, only 12km from the city, plenty of schools nearby but stock is generally older and has a higher vacancy rate (houses)

Zillmere is Ok, but I agree with Andrew about the new developments. E.g. there’s new one crammed to the limits on block between the major junction (Zillmere Rd and Murphy Rd overpass) and railway. But hopefully new developments will refresh the shady area around the railway station.

One thing that will be probably good for Zillmere is building the new railway overpass in Geebung (the next railway station towards the city) that is about to commence soon. That should increase the traffic on Robinson Rd, and take some heavy traffic (and noise) away from the Zillmere Rd.

 

[DaveS]

Hey guys, thanks for all the replies so far. Theres some great information up there. I would agree with Nth Brisbanite - I also think Zillmere has better long term growth potential for the same reasons listed. However it does have it's social issues which Andrew A has mentioned. I think that block of units JoB is talking about stretches from Zillmere road right through to Seeney st! Andrew I am only interested in houses at the moment, units and townhouses are not my thing. Zillmere's highish vacancy rate (currently 2.4%) is my main concern about investing there. I guess there could be alot of empty units/townhouses which may be influencing the figures? Is there somewhere you can find vacancy rates by the suburb but with houses and units/townhouses seperate?

 

[Andrew_A]

Hey guys, thanks for all the replies so far. Theres some great information up there. I would agree with Nth Brisbanite - I also think Zillmere has better long term growth potential for the same reasons listed. However it does have it's social issues which Andrew A has mentioned. I think that block of units JoB is talking about stretches from Zillmere road right through to Seeney st! Andrew I am only interested in houses at the moment, units and townhouses are not my thing. Zillmere's highish vacancy rate (currently 2.4%) is my main concern about investing there. I guess there could be alot of empty units/townhouses which may be influencing the figures? Is there somewhere you can find vacancy rates by the suburb but with houses and units/townhouses seperate?

Is 2.4% vacancy considered high!?

I'm sure there is a genuine vacancy factor with residential but if your property has two things 1) reasonable or better condition and 2) a location somebody would want to live in then the vacancy rate in greater Brisbane in my opinion should be approaching 0%, even at 2.4% that would equate to approx 1 week vacant per year (hardly disaster planning scenarios) you can get a grip on the supply demand balance with some basic due diligence into rents, see what similar property is renting for, talk to a few different managers.

For your basic solid investment property that is in maintained in good condition (a place you wouldn't mind living in yourself) you shouldn't have any issues with vacancy, I never have.

I don't mean to be dismissive but three published figures I don't pay attention to, yet are often mentioned to me include.

1) vacancy rates percentages: obviously an important consideration but you are monitoring what your investment is going to yield carefully anyhow, which means being tapped into the reality of how it will rent out.
2) historic median price growth: You need to know better than this, why it's still published widely I'm not sure. The problem being medians and not growth history which can be important.
3) discount to list prices: Lagging and at best useless indicators of what the market has done, by the time you read them the sales agents who want to eat have already adjusted their market strategies and each deal is an individual purchase measured by it's objective value, not city wide averages.

 

[mattysavager]

Our office manages around 100 units and townhouses in Zillmere. All new stock (less than 3 years old). We only have a handful in Bracken Ridge, and they are houses in estates.

We find it to be our most difficult location. If you drive down any street, you can probably find 2 or 3 new complexes under construction = competition. A quick look at realestate.com.au will tell you what I know - that there are HEAPS of units available. All brand new, perfect units. They are competing with one another. Some times of the year is like a race to drop rents (so that your unit is one of the cheapest) and get that elusive tenant.

It is also difficult to increase rents. Generally tenants will see that they can move out of the unit, move across the road and save $20-40 per week for a newer version of the same thing.

Many prospective tenants are put off by the quality of other residents in the street, cars in the front yard, shoes hanging off the power lines etc. I have had groups of school age children throw rocks at my car as I drove past. There are lots of pockets with a high concentration of housing commission homes.

Like any investment, you don't need to live there, so the quality of the suburb itself might not matter to you - as long as you are realistic with your pricing, and do not listen to what the builder/investment planner tells you it will be worth - do your own DD.

 

[fatboy4]

speeling

Guys

it's is always "it is"

the possessive form is "its" as in "the cat chased its tail"

Just one of those quirks of our language. Sorry to be pedantic.

 

[benofbrisbane]

I think Zillmere is a much better bet than Bracken Ridge. After all it is only 25 minutes from the city on the train and 5 minutes to Westfield Chermside.

I think the units/townhouses developments in the area are actually assisting with the change of the suburb for the better. Lots of younger professional single couples buying/renting. They will of course attract more the same and the coffee shops etc will follow.

If houses are your thing, they are pretty cheap at the moment. You might even be able to buy something LMR so that you can cash in when the developers comes knocking!

 

[benofbrisbane]

BTW, the 2.4% vacancy rate has only just come about in the last couple of months. Prior to that it was around 1.4% (or something like that) for ages. I don't know if it is a seasonal thing.

 

[C-mac]

Thanks guys for the information on Zillmere.

I am considering the area for more long-term growth at this stage. I agree, there will be a few years ahead of property holding 'rent wobbles'. But I think risk would be mitigated for those with a medium-long (say 7-15+ years) holding strategy.

 

[C-mac]

Hi everyone,

Just circling back on this topic. After a couple of months of searching Zillmere and surrounds; I picked up a tidy little unit performer just over the weekend.

If anyone is considering buying in Zillmere, based on my (very) recent experience it is a pretty 'hot' market. Not exactly the best buyer conditions to be honest, unless you are able to get in quickly, like I did.

And I mean quick! The townhouse I procured was listed on the usual online sales traps (Domain, REA, Real Estate View etc) at around 4pm Thursday last week. I ran my numbers/spread sheets late into that night, and 9am the next day I had my contracts sent to me. Friday day I reviewed with solicitor and ran searches etc, before returning signed, conditional offer contracts.

10am Saturday and my offer was accepted, 3 hours BEFORE the first open for inspection. And lucky I did all that within 48 hours prior to first inspection. Owner had accepted my offer in the morning at 4% discount/negotiation off of asking price; then at 4pm after inspections they had two offers AT asking price, and one slightly below!

 

[RetireRich101]

Hi everyone,

10am Saturday and my offer was accepted, 3 hours BEFORE the first open for inspection. And lucky I did all that within 48 hours prior to first inspection. Owner had accepted my offer in the morning at 4% discount/negotiation off of asking price; then at 4pm after inspections they had two offers AT asking price, and one slightly below!

In this warming cycle of Brisbane properties I find the early bird in making offer still present an opportunity. I also find if the previous contract didn't fall through due to buyer pulling out and Owner had bad experience with extension of B&P and Financial clause which wasted several weeks time, Vendor tend to sell the property if you offer 5% discount and go unconditional....
There is a risk to offer on unconditional, but hey when Brisbane moves to all Auction style selling, you will be buying unconditional under hammer anyway.

In Sydney where we don't have B&P/Financial clause and 80% are auction style we don't have this opportunity in boom cycle.

 

[Nth Brisbanite]

.

If anyone is considering buying in Zillmere, based on my (very) recent experience it is a pretty 'hot' market.

Your observations are very similar to mine where properties are snapped up soon after listing. It's a good indication on how Brisbane is performing at the moment.

 

[Angel]

Seems a lot like it was this time of the year in 2010.