40k in grants, Brisbane, Logan, GC?

Discussion in 'Where to Buy' started by jb3393, 22nd Sep, 2020.

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Build and use the grants, or buy existing elsewhere?

Poll closed 29th Sep, 2020.
  1. Build

    11.1%
  2. Buy existing

    88.9%
  1. jb3393

    jb3393 New Member

    Joined:
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    Brisbane
    Hey all,
    I am in the following position:
    1st home buyer
    Eligible for 15k and 25k if new
    Capped at 475k contract price unless I want to pay LMI ($~15k)
    25k and LMI waiving to lapse December 30
    I am more looking for something with capital growth than rent yield.
    Would like to live in the property for >12months with the option of leaving after and using equity to buy more property.

    I would really appreciate thoughts and insights on the following:
    1) use the grants? Or buy existing
    2) if using grants and building new then where do you suggest?

    Areas I’m considering are mostly pimpama and Bahrs scrub at the price point I’m at. Though I’m happy to hear recommendations and thoughts on other areas (preferably with reasoning)

    Pimpama: banks are not valuing the blocks (out by ~5%) possibly due to CMA and not much data. They’re going for about $300,000 for a 375m block. Good demographic. Broad hectare map shows an additional ~30% more development in the local pimpama village area in 2-5 years. Slightly higher amount of IPs in the area. In particular I like the demographic. 5-10 year plan I think is OK to be in the middle of GC and Brisbane as the broad hectare maps aren’t showing too much proposed development between Logan and Pimpama.

    Would love to hear your thoughts. Thanks all
     

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  2. Closet

    Closet Well-Known Member

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    See if you can jag a larger 600 sqm+ block in the in demand established land locked areas like, regents park, daisy hill, springwood etc. If there is a sea of land cg will be a while coming and these other areas have constant demand from oo with above avg incomes so may see consistent growth. Have a look at 10 year plusgrowth for consistent demand trend % of oo to investors and incomes to initially screen suburbs. As always dyor
     
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  3. My House QLD

    My House QLD Well-Known Member Business Member

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    Daisy Hill and Springwood are great suburbs for future growth but I doubt you will find a new house and land package for 475...
     
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  4. MelindaJennison

    MelindaJennison Brisbane Buyer's Agent & QPIA Business Member

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    If you are looking for capital growth and relying on a 12 month timeframe to try and pull equity out of the property to finance the next purchase, it is more likely that an established area will provide that growth rather than a brand new property in a new estate.
     
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  5. Paula Ospina

    Paula Ospina Active Member

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    Hi JB :) If your plan is try use this first purchase to be able to quickly get into the second. The agree with Melindas comment above, established provides much more opportunity for this.
    1. With established you generally have more opportunity to manufacture growth via a reno etc.
    2. There is more opportunity to buy under its intrinsic value (as new mostly always come with a premium that your paying for (developers profit) and the new fittings and fixtures.

    I wouldn't base the location and selection of such an expensive purchase (like a property) solely on receiving a grant cause over the long term saving a couple thousand wont mean that much if it came at the expense of buying something that didn't perform.
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Don't buy house and land JUST for the government grants, most developers already factored that into the purchase price and you'll likely see no growth in the property for many years to come.

    I would disagree about your comments regarding Pimpama - I've driven through those developments and in my opinion they are horrible, the future outlook is pretty dismal.And the total percentage of IP's in Pimpama village is much higher than you've suggested. You can buy 5 year old houses on bigger blocks in better estates (Gainsborough Greens for example) for $100K less than what they were originally sold for.
    The reason the blocks aren't valuing is not due to lack of CMA data - it's because the valuers on the ground know they're not worth it, $300K for a 375m block, it's overpriced!
    I had a long discussion with a valuer at CBRE about Pimpima Village yesterday, lots of interstate buyers, investors buying sight unseen and behind the scene deals between builders and developers.
    Pimpama Village has a 'no resale' clause on the land contract, meaning the developer gets first right to buy the block if you buy it then decide not to build and resell. or if you get a half built house and can't complete it. This works in their favor, keeping the land values artifically high.
     
    Last edited: 23rd Sep, 2020
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  7. jb3393

    jb3393 New Member

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    thanks appreciate it
     
  8. jb3393

    jb3393 New Member

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    thanks for the heads up
     
    Lindsay_W likes this.
  9. momentum26

    momentum26 Well-Known Member

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    The general consensus would be to go for existing houses.
     
  10. Codie

    Codie Well-Known Member

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    I agree with this. I own one of those you speak off in Gainsborough Greens. Whilst valued $100k higher on completion and allowed us to get our second. It’s now worth around 5% less 4yrs later

    I was young, nieve, and thought all property went up. Without understanding every new house that’s being built around you for the next 10yrs just increasingly makes your one worth less.

    To the OP honestly please don’t go down this track you will stunt your goals big time.

    Spend that little bit extra time building a deposit, even if it takes you 12-18 months (there’s always an opportunity) and buy exisiting that needs some work, as close as you possibly can to inner/middle Brisbane. Use LMI if you have to, if it’s a necessity, $10k LMI now, may make you $100s more in growth in the future if you buy in the right suburbs. (Not to mention it’s tax deductible for the first 5yrs)
     
  11. MelindaJennison

    MelindaJennison Brisbane Buyer's Agent & QPIA Business Member

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    Ouch ... so you are in a negative equity position 4 years later?
     
  12. Codie

    Codie Well-Known Member

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    Not negative no. I don’t mind sharing figure’s

    Total completion cost $553,000 including LMI, valued up at $650k within 12 months after (2016/2017) pulled equity and went again

    If I was to sell it tomorrow would get $620-$625k. Being realistic.

    it rents for $630 a week so it’s quite cash flow positive, not a horror story by any means but it’s the opportunity cost of

    1. Tying up $500k of serviceability that could be in a better located asset
    2. Very little growth over the next 10yrs.

    I will likely look to sell in the coming years to deploy elsewhere.
    What I do know is I have friends & others that own in the same area, mine is an outlier due to it being a big block, and a big house, (hence good rent)

    Most builds in that area or estate will be in negative equity
     
  13. gach2

    gach2 Well-Known Member

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    40k is a decent chunk of 475k (notsure what extra stamp duty benefits you get)

    Maybe a smaller subdivision (300k) and limiting the build to 150kish. If its similar/cheaper to what the median is and suitable for yourself then maybe.
     
  14. MelindaJennison

    MelindaJennison Brisbane Buyer's Agent & QPIA Business Member

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    So you are definitely the lucky one!! Good on you for choosing the property with some scarcity factors. Yes I'm sure you will be weighing up the opportunity cost ... but sounds like it is not as bad as it could have been.
     
  15. Astrid75

    Astrid75 New Member

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    Just wondering if people's views on what a good location means now has changed in world where WFH is gaining traction?

    For example, if comparing an unrennovated older home to a new home in new estate. If the older only has a better location due to it being closer to the cbd (maybe save 15-20mins in transit) would that still sway your view towards the older home if the quality of schooling, distance to shops, access to parks beaches etc are equal?

    What factors would you need to see to be sold on the older home?

    I am really seeing a trend amongst my large circle towards people wanting to live in new and larger houses even if it means more travel - everyone has blacklisted townhouses/apartments. Does this trend mean that the demand for townhouses/apartments i.e. smaller subdivisions will plummet hence value of land in most places may suffer and the value now lies in the building?
     
  16. MelindaJennison

    MelindaJennison Brisbane Buyer's Agent & QPIA Business Member

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    Good question!
    Ultimately property prices move up or down in response to supply and demand. In an area where there is high demand, but also high potential supply, prices remain flat. If supply outstrips demand, prices fall (eg: Brisbane inner city unit market oversupply that peaked in 2016). Whereas in an area where there is limited potential for future supply, and increasing buyer demand, prices go up.
    Schools, shops, parks and beaches all contribute to demand ... but demand always has to be considered alongside supply when we are talking about property values.
    Hope that helps :)