QLD 2020 is the year for Brisbane!

Discussion in 'Where to Buy' started by Realist35, 22nd Jan, 2020.

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  1. gman65

    gman65 Well-Known Member

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    Maybe just random, but one of my 10km properties has my several year tenants moving out to buy in a month. Bad for me, good for them no doubt and maybe it could be part of a wider trend.

    Also valuations I am looking at are back to where they were 12 months ago (they dipped about 6 months ago).
     
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  2. Patrick Bateman

    Patrick Bateman Well-Known Member

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    Taringa where I have a couple of properties is going well . 400m2 vacant block with less than ideal proportions (20x20) with no significant views just sold for $812k .
     
  3. Sackie

    Sackie Well-Known Member

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    It's the location. Very strong OO appeal. Strong demand. I've been saying like a broken record, certain areas and stock types are performing well and anticipated to do even better over the next few years. Brisbane markets are very segmented imho. If you own in the high demand areas and bought at good prices, you're laughing now.
     
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  4. Patrick Bateman

    Patrick Bateman Well-Known Member

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    Yep you’re spot on . School catchments becoming more and more important I feel .
     
  5. Sackie

    Sackie Well-Known Member

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    Wholeheartedly agree. It's a big one.
     
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  6. Skinman

    Skinman Well-Known Member

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    A few kms further out but the same thing just happened to me. Tenant moved out to purchases and valuation back to where it was 12 months ago after small dip.
     
  7. sash

    sash Well-Known Member

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    Look I own 7 places in Brisbane... unfortunately my returns pale in comparision to my properties in Sydney (includes Central Coast), Wollongong, Geelong and Melbourne.

    I don't think we are going to see the huge growth some here are saying. Even in the Inner City locations....the people developing are luck to make 100k per property. Just not going to happen.

    Even Western Melbourne and Geelong will easily outperform even the better suburbs in Brissie in terms of return.

    From my observations sure inner Brisbane has moved...but only about 100-150 over the last 5-6 years. Doing a development there and splitting does not make sense...most of growth would be due to natural growth.

    I am hoping this will be different but I think the Southern states will be doing better. I have spent about 1.92m in Brissie but have only made a profit of 700k to date. ..mostly in the last 5 years a apart from 2 I have held for 10 years..

    Just in Geelong I have spent $1.35m....in last 4 years. They are now worth 2.2m (once construction on last 2). That return makes Brisbane's growth look anaemic...and all of these have been new so very little maintenance. The rents across these would be about 85k...that is also great on the original purchase price of 6.2% plus depreciation. So positively geared.

    I feel sorry for a lots of newbies who piled into Logan lower socio..I don't reckon they will break even in real terms.
     
  8. wylie

    wylie Moderator Staff Member

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    There are plenty of splits being done all over the place though, so someone is making money.

    I do know a developer who wanted to buy our block with DA, ignore the townhouse DA and extend and do a major renovation to the existing house. He said the money to be made in the current market is creating a fabulous big house on a big block. This developer has done townhouses but is currently doing big house on big block developments.

    We wouldn't make money doing our development if we were selling, but we are building them for cashflow, so it is less important for us to make an immediate profit.

    But it doesn't mean we don't have to be careful of how much we spend and the level of spec. We are still working to a spec to give us an end product that we could sell for a certain figure, so that we are not overcapitalising.
     
  9. sash

    sash Well-Known Member

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  10. Patrick Bateman

    Patrick Bateman Well-Known Member

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  11. Jana

    Jana Well-Known Member

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    Sash,

    You compare apples with oranges. Geelong was part of booming, and Brisbane haven’t. Brisbane didn’t move last 10 yrs, so you can’t expect much. Next 10yrs Brissie will show substantial growth and Geelong had already done. If you compare next 10 yrs, Brisbane most likely outperform Geelong...

    Just a 10 year cycle I look into.
     
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  12. Sackie

    Sackie Well-Known Member

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    The numbers re Brisbane developments definitely makes sense if you have the right stock in the right location and are able to get it built for the right price. That also goes for significant renovations.

    There are people doing it. Right now. You can't be an expert in every niche market and think you know the ins and out of it, just because the broader market may be performing a certain way. Anyway each to their own.
     
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  13. sash

    sash Well-Known Member

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    I hope you are right....but I can't see the growth.....

    Geelong is about to jump another 5-10% this year....mostly in the back of Melbourne. But also the number of jumps being created there.

    Avalon has just put on another airline Citijet which flies to Bali direct. Airasia is already flying out of there. Vietjet is going to start services later this year. What will take over 8 years with Sydney...Avalon via a private partnership has done in less than 3 years.

    More services to come...potentially Cebu Pacific....Tiger..and Jetstar doing international services...matter of time.
     
  14. Leeroy93

    Leeroy93 Well-Known Member

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    I read that the new runway in Brisbane airport will effectively double the capacity. So you could use the same reasoning to justify some upside for Brisbane. Record international traveler numbers this year and the airport is substantially larger already than Avalon so potentially even greater scope to impact the local economy.
     
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  15. sash

    sash Well-Known Member

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    Lets hope so..... I don't mind...but it does not have a population of 5m less than 60 klms away....
     
  16. kierank

    kierank Well-Known Member

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    Why?

    Because in Sydney, $2M to $3M doesn’t get you much :eek:.

    In Brisbane, it get you “fabulous big house on a big block” :p.

    So buy them now and use them as weekenders. Fly up Friday nights, fly back Monday mornings :D.
     
  17. fols

    fols Well-Known Member

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    I lot more Sydney execs flying out of Brisbane and Gold Coast every Monday morning. Fly back to the family at the end of the working week.
     
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  18. Bris developer

    Bris developer Well-Known Member

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    def seems to be moving. West end now is very hard to find anything under $1M even if it needs significant renovation.

    yesterday there was 10 offers on a double block (already subdivided) in Alderley so lots of builders or OO are starting to pull the trigger or deploy their dry powder.

    30 Hall Street, Alderley, Qld 4051

    it is on 2 lots already and it went under offer @ $1.02M. I feel that at that price however there still ain’t much margin left as new stock on 405sqm is selling for $1.2-1.4M.

    Maybe experts like Sackie can fill in. $1.05M with stamps + $1.2M to build 2 homes with holding costs = $2.35M... vs end resale of $2.4-2.8m??

    I agree with Sash tho that while Bris is moving, the margins are still slim... I mean you may make 200-300k there after doing a project if it all goes to plan but doesn’t seem worth the risk. We don’t have the growth velocity off a high base that Syd and melb has.
     
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  19. sash

    sash Well-Known Member

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    100% mate.

    After GST and other headaches...it don't think it will worth it! With the margin scheme...on a 2.6m. People buying will hold back 7%. ...so that is 170k. With GST credits....you could back 70k. So all that effort for 200k...no thanks!

    Money maybe in just knocking and rebuild with a good size build. Simple stuff always makes money.
     
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  20. Bris developer

    Bris developer Well-Known Member

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    I agree.
    For me as it’s on 2 lots (no subdivision or holding costs), I think there’s the same profit in just knocking the house and selling each block for 600k each - prob a quick $100k in it?. As there is a slope there and other blocks have sold for 620-630k in the suburb.

    but the issue I found in 2018-2019 is buyers are placing substantial discounts on vacant 405 blocks... hopefully that starts to turn .

    I think Bris is a good market for land subdivision if u can buy well... but u really can overcapitalise on the buildings here ...