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QLD Arise Moorooka, the new Marrickville.

Discussion in 'Where to Buy' started by Steven Ryan, 4th Mar, 2016.

  1. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    One word:

    Gentrification

    Taking what I learned from the rapidly gentrifying Marrickville, NSW, I went hunting for the same fundamentals in Brisbane. In early 2013 I began investigating Moorooka and have kept an eye on it since.

    Friends and clients have been quietly buying in Moorooka so I haven’t been as vocal on the areas as I would have otherwise, but the time has come.

    Arise Moorooka, the new Marrickville.

    The early stages of gentrification are in full swing and the suburb has reached a tipping point. There’s no turning back.

    Below, I share some of my thoughts and observations.

    First, a rundown on Marrickville. I’ll put this in a quote to save space.


    Moorooka

    Fundamentals:
    • < 10km to brisbane CBD
    • Overlaps Toohey forest
    • Well serviced by transport
    • Good amenities
    • Pro-active council
    What it was:
    • Rough, grungy, “third choice” suburb
    • Lower entry price than surrounding suburbs (e.g. Tarragindi, Annerley)
    • High immigrant population, particularly Sudanese
    • Great cuisine; foodie sites raving about hidden gems
    • Pockets of housing commission
    • Swatches of industrial/commercial (Ipswich Rd and flanked to the south by Salisbury)
    • Tired shops on main drag
    What's happening:
    • Nearby suburbs are getting too pricey for their own good
    • People are looking for something similar, for less (even in the last 6-9 months the people turning up at opens homes has transformed)
    • In they’re coming - hipsters and the like
    • Significant upgrade to Woolworths
    • Renovations left, right and centre
    • BCC 2014 City Plan rezoned a bunch of Moorooka to LMR
    • Investors/developers started snapping up blocks to become units/townhouses/subdivisions
    • Council encourages development activity and is flexible with their “rules”
    • Foodie websites rave even more
    • There’s a shift toward selling at auction (esp. the $650k+ segment)

    My investment strategy isn't very exciting: Buy in gentrifying areas, with good transport and amenities, near major CBDs.

    Moorooka ticks all the boxes.

    I bought a 658sqm LMR corner block near the school in 2015.

    I believe Moorooka represents excellent value today and will evolve dramatically over the next decade, and beyond.

    What to look for:
    • Big (ideally LMR-zoned) blocks
    • East of Beaudesert Rd
    • Not too far south (close to Salisbury)
    Buying:
    • It’s the quick or the dead - pounce on opportunities and don’t let your offer sit on the table for long
    • At this stage, the majority of your competition is first home buyers but investors are moving in
    • Everything around the median (without major issues) is under contract the first week it’s listed
    • Some of the agents in the area are still asleep - it’s possible to buy well under value if you know the market. Look for agents who don’t list in the area often/ever...
    • Always check council maps - half the LMR stuff being sold has no mention of the magic letters and check for flood, bushfire, air quality, noise, character etc etc.
    • “Clifton Hill” is the fancy part - you'll pay a premium

    Anyone own or looking in Moorooka?

    Disclaimer: This is not investment or financial advice. Do your own research, seek professional advice and act in line with your means, risk profile and goals.
     
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  2. Foxdan

    Foxdan Well-Known Member

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    I was looking there for around 6 months waiting for tax returns to get finance approval. But you banged on about it so much during that time that everything is snapped up within days now :$
     
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  3. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Haha. I don't think that many people are reading my posts. Nothing wrong with a competitive buying market. Marrickville was nuts when I bought in 2013 and 2014. Still did ok ;)

    If it's any consolation, I was trying to buy in Moorooka in 2014 but a bad val and some other obstacles pushed out my readiness to purchase substantially. Prices moved plenty in that time.
     
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  4. vbplease

    vbplease Well-Known Member

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    Driving through yesterday I noticed a couple used car dealerships had closed down.. I wonder if new ones will pop up? I think if they reduced 'the magic mile' to a magic 300m, kept the new dealerships and swapped the dodgy used car lots for retail/high density living it would really turn the place around..
     
  5. Foxdan

    Foxdan Well-Known Member

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    It's ok, if you start banging on about others areas I'm looking at, I'll be sure to say how crap they are ;)
     
  6. larrylarry

    larrylarry Well-Known Member

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    I think the entry prices for houses a little high for me...
     
  7. EN710

    EN710 Well-Known Member

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    I was waiting for the big post from you hypeing up Moorooka after doing it descreetly for so long :rolleyes:

    :D
     
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  8. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    There are rumours floating around that whole strip will be rezoned to high density residential in the not too distant future. Here's a snapshot of some recently transacted stuff around the magic mile.. just because.

    [​IMG]
     
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  9. Bran

    Bran Well-Known Member

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    I think longer term there is a reasonable chance of up zoning, except... that this corridor is in an air quality and noise pollution type corridor due to Ipswich Road. This may be prohibitive.

    Oops. Steven Ryan has already commented.
     
  10. Bran

    Bran Well-Known Member

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    Moorooka was very high on my list also, and I put in 6-8 offers in quick succession from memory in the last few months.

    I went from Greenslopes where I bought in 2015 (after realising that it had had no movement for no reason). It subsequently jumped a lot, and I could no longer find anything of value, so I followed the ripple into Annerley - not much growth, Tarragindi (expensive) and then Moorooka.

    Pockets of Moorooka are great - the Clifton Hill precinct is a residential premium precinct at a premium price point. I tried numerous times to buy something BMV and didn't even get close to success. I then started offering market value with no success. I then started offering strong price cash unconditional offers, and finally got a bite only to pull out on site specific DD (810m2 LMR block site unseen.. yikes. It had the wrong slope, bad infrastructure and unworkable overlays).

    Check the flood maps.
    East of Beaudesert Road is mostly all good - generally speaking, the closer to Toohey Forest/Tarragindi, the better. I haven't checked in detail - you might get snippets in the Weller Road State School catchment.
    Between Ipswich Rd and Beaudesert road is higher housing commission, doesn't 'feel' as nice, but provides better opportunities for LMR blocks.

    I think the true gentrification is still to come. Locals are still wary and often raise their eyebrows, but this is definitely changing. It will take time and someone taking a punt business wise. The main drag is nearly solely african specific stores of varying kinds.

    The competition buying wise was never investors, but OO and FHBs pushed out in the same-old-story fashion - Coorparoo, Greenslopes, Holland Park, Tarragindi all too expensive... feet found in affordable Moorooka.

    There are still definitely some good buys, but bargains are fewer. I became wary and pulled out when I realised that prices were now comparable to Holland Park, Tarragindi and exceeding Mount Gravatt East so I pulled out of that market.

    Anything that is still on the market after its first open has a problem - either overpriced or site specific.

    Particular agents are pushing hard for auctions, and its largely working and drumming up interest. This is a downside for us.

    The drain on Moorooka will 'always' be Ipswich Road, the Magic Mile, the flood zone, and the industrial areas (until these move on).

    (For the out of town investors, blinkers aren't necessary - the other side of Toohey Forest is equidistant from CBD, is undergoing similar gentrification and has none of these same downsides, plus is more accessible IMO. But it has it's own thread elsewhere ;) )
     
    Last edited: 4th Mar, 2016
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  11. meme plecko

    meme plecko Well-Known Member

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    Cool, where did you get this snapshot from?
     
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  12. JDP1

    JDP1 Well-Known Member

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    Yeah id probably agree with the marrackville to spruik-rooka parallel as youve laid out.
    However id think several similar inner bris suburbs fall in a similar category and have shown similar cg numbers...
     
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  13. samiam

    samiam Well-Known Member

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    @JDP1 - could you name a few? especially the ones lagging behind? :p
    thanks
     
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  14. Bran

    Bran Well-Known Member

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    Most inner Brisbane suburbs have done this, as they were all largely worker's areas with their subsequent cottages. Just start from the CBD and work your way out. The median price discrepancies become apparent. Do a search to find out why e.g. Rocklea.
     
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  15. Azazel

    Azazel Well-Known Member

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    I remember them talking about dealers buying more houses/land on that side, not sure it will get smaller any time soon.
     
  16. WattleIdo

    WattleIdo renovating Premium Member

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    Looks like you really need to be familiar with the flood map before making further moves. Also, Brisbane's growth patterns differ to Sydney's. There is some usefulness in making suburb comparisons and I will keep an eye on Moorooka now. Did you end up buying there @Steven Ryan ?
     
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  17. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I pieced it together from RPdata.

    Where did you hear this? The sales and ownership data on stuff along that strip doesn't directly suggest car dealers buying more (aside from one key sale about 4-5 years ago). There are lot of one-off companies developers and some super funds picking stuff up around there.

    I did, yeah.
    Got it well under value (first week open), 4.8% rent return (way above median), excellent development potential.

    Sold Price for 18 Blomfield Street Moorooka Qld 4105

    Hmm...just noticed the sale price has been removed from the listing. Maybe the agency is embarrassed at how cheap it went.
     
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  18. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    A bit of history (up 289% over a decade and a half):

    [​IMG]

    Then...up 28% over the next 8 years.

    [​IMG]
     
  19. Heinz57

    Heinz57 Well-Known Member

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    bought in Clifton Hill - Annerley postcode but Moorooka just about - in 1993 for $140,000. Reno and sale coupla yrs later for $190,000. Looking at your numbers we did well to make 50k in a flat market but that's about the only smart thing we did!
     
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  20. JDP1

    JDP1 Well-Known Member

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    As others mentioned, be wary of floods. Check the online flood maps given by bcc i think. The police online interactive crime maps are also useful...
    There are not many bargains to be had and if there are they will be subject to high competition and will be gone quickly...but its all a bargain compared to sydney i guess :)
    I would think the highest growth oin the short and med term is 5-10km of cbd in pretty much any direction. Long term, the cbd and surrounds. This is where i think the long term concentration of demand will be...by not just investors but increasingly oo.
    As mentioned in another thread, be wary of over oversupply. This can happen even in the same suburb eg cooparoo. Some parts will have a lot of new stock...yet other parts of the suburb will smash it cg wise in short and med terms.
     
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