QLD 70s Yellow Brick Flats - the lost decade

Hi there

Interested to hear from any members that might own the typical 2 bed 70s style flats in Brisbane.

The capital growth on these seems quite good from mid 80s through to 2008 or so. The last decade however seems to have flatlined or dipped slightly. Looking around Clayfield, Hamilton (but pick any suburb these exist) and you find plenty in the 300-350k mark.

They seem attractive from a yield perspective and a low entry point but I am interested to hear peoples thoughts on what they think the next ten years may hold for these types of properties.

While the growth on houses during the same period has been slow the percentage on these seems to be disproportionate.

cheers

 

I have posted a few things on my opinion on this but I believe the period from 02 to 08 Brisbane went through an incredible growth spurt and the median jumped from $160k to $420k, that growth is still being paid for in the last decade, you add the floods to it and low jobs growth and we see a stagnant decade, if prices even continued at a low/moderate growth rate, we would be as expensive as Sydney...

In terms of units, for prices to move you really need strong owner occupier appeal, in strong locations with walkability. Ground floor or 1 story walk up, high land component, ability to add value, walkability to transport & cafes/shops, potentially river/water access, and it has to be accepted in the suburb. IE, I personally wouldn’t buy a unit in Ascot for example, GREAT suburb, but is dominated by houses, I think the same can be said for Clayfield, and Hamilton has increased in density massively. Supply is the killer of capital growth.

Im bullish on the exact units you speak of providing it has all of the above, inner ring, and is in a very small complex of say 4-5 units with walkability and land value. Im comfortable with what I have purchased to fit my goals/strategy and think its an opportune time to buy this particular unit in Brisbane, but I wouldn't advocate everyone rush out and buy a unit as there's 90%+ that aren't worth touching and getting it wrong may see another decade of low/no growth.

 

A few factors that may play out and influence them as a solid buy with decent yield if bought for right price in right location. I would be looking for ground floor with some exclusive outdoor space and walk ability and good location inner ring.


Recent widely spread news about quality of newly built units - may make older units where build issues likely to have shown themselves by now, more attractive.

Yields dropping, particularly on term deposits - if this is a trend to stay, older people wary of stock market and high risk investments with approximately a million cash in the bank might find buying such a unit as an investment has more appeal, and no need to take out a mortgage or making it the only investment.

I understand the point about Ascot having a demographic not dominated by houses, but long term I think a good suburb close to city with lifestyle factors such as cafe strips can hold some appeal in the long term for ground floor units with good yield and accessibility in particular.

Aging population means a suburb dominated by houses will have older people who may want to downsize to low maintenance and more accessible units, but stay in their suburb. Or people moving from further out burbs who want a more ‘walkable’ suburb to downsize to.

My suburb in The Gap is mostly houses and a good size portion of the population is aging - many of whom might might like the option to downsize to more accessible housing, but there are very few suitable options in our suburb.

Most higher density housing in our area is townhouses designed with no thought to this demographic, which I think is a missed opportunity. Usually living downstairs with no extra bedroom and bathroom on this level.

I was discussing this with a local agent who agreed, and said the only unit complex built so far in our area with a lift had proved very popular with this demographic, because there was a lack of suitable downsizing alternatives in the area.

Go closer to city to Ashgrove which is
mostly houses but more inner city, and there are some of these older unit blocks. I think some of these have potential to offer yield with long term appeal to downsizer market as well as those wanting something affordable in a good inner suburb.

Potential game changer for these
In the future - if state government ever changes body corporate rules to align with some other states to make it easier to vote for redevelopment. These types of blocks might then have more demand due to increased potential to redevelop new higher density in desirable suburbs with character controls which limit sites for high density development (such as Ascot and Ashgrove).