Brisbane Home: To hold or sell?

Hi Everyone,

Would like your views on this.

I have a place in Inala, Brisbane QLD 4077 which is a standard 3 bedroom house with 2 bathroom minimal renovations.

This property was bought in 2009 at what was the peak of the Brisbane cycle and it has moved minimally. Bought for $320,000 and now worth $340,000 so would break even.

I have a further property in Reservoir, Melbourne which has gained some equity however was valuated quite low so the equity would not be enough refinance to purchase a further property in Melbourne. This property would be in the vicinity of $700,000.

I could also wait a further 6 months to have my IP in Reservoir revaluated but am worried about houses further going up in prices and being priced out.

Positives:
Cash flow neutral: rent paying at $325 a week
Good tenants with minimal upkeep
Minimal other costs
Brisbane may grow soon?

Negatives:
Lack of capital gains
Loss of opportunity costs
Looking to sell to avoid CGT (PPOR until recently)
I can live in next purchase as PPOR (Melbourne)

Long term I am looking at buying a further property in Melbourne (where I live) and am finding it difficult to service this further purchase. I have roughly $270,000 oweing so would be about $600000 positive after agent fees/conveyancing etc.

This extra $60,0000 would go towards my deposit for my Melbourne property.

Should I keep the property as it is cash neutral?
Should I sell and buy a further property in Melbourne?
Should I wait to get a further valuation in Melbourne?

 

I would definitely keep that property. If you look at the trend in the attached picture, the suburb has been performing pretty consistently over the past 3 years, around 7% growth each year. It's very affordable suburb, cheap entry point, which I think is important going forward with all the limitations APRA is imposing. Also I think as Melbourne and Sidney become even less affordable, many investors will turn to affordable markets.

 

Hang on ...unless you cannot afford holding costs

 

Selling now and buying again in Melbourne will mean transaction costs and then there is no guarantee you won't buy at the peak of the market again.
Hold.

 

The other thing to consider is that when you want to purchase the 3rd property in the future, holding the Inala property might not affect your serviceability but another property in Melbourne would. So try to hold the Inala one for a whole property circle and try to do some value adding thing to the Reservoir house before getting it revalued.

 

My parents bought a house in Mansfield a number of years ago for ~130k and after 8 years (IIRC) it was worth not much more above it. However it comes a point where it becomes to greater value and it needs to grow. For my parents it doubled in the next 2-3 years and today the house is worth about 600k although it has been about 20 years since they purchased.

I personally myself would hold it as I can only see upside for Brisbane because really someone buying today is paying the same as what someone else was paying nearly 10 years ago... Something has to change .

 

Appears you bought at the previous peak. I'd personally hold it out another couple of years given Brisbane hasn't had the same growth for quite some time.