BRISBANE (PPOR): Is an older, well located walk-up ever a good idea?

I see most talk favouring the purchase of houses in Brisbane. I totally get this. No argument.

But, for a PPOR, if one doesn't have the funds (single income) for a decent located house, is an older well-located walk-up a decent purchase in the Brisbane market?

My goal is to pay off a portion of a PPOR earlier than would be possible with a house, to reduce living costs/increase assets. The main appeal of the unit is location and yield from renting out a large room in a property that doesn't require renovation. Eventually, I may sell the unit and purchase a house, or turn it into a investment property.

For interest (I don't want to focus the thread on houses), the reason I am thinking of units, is houses within the affordable zone/outer ring make me nervous due to either excessive commuting time or undesirable areas. I am also not sure these houses, which are around 300k-400k, would realise capital gain.

 

I have actually just gone through this exercise. Ended up going with my gut and buying as it will also be a PPOR for us as well.

I think there’s such a negative outlook on units because Brisbane hasn’t accepted it yet, affordability to purchase houses has never been an issue. However my view is this will eventually have to top the scale, to a point in time where house prices in Brisbane reach a point and land supply is scarce, that we will do ok. Yes this could be 10-15yrs away and take another million people to move here. But it has to come eventually.

If you can also pay it down reasonable quickly, your going to free up equity to be able to add to your portfolio anyway.

At the end of the day, if it’s in a desirable area, you can add value, and it’s a solid walk up. I don’t think you will go backwards.

 

I think would would have to be extremely careful with the area that you buy in and ensure that it won’t get built out with excess supply. I have just recently made the trip up to Brisbane and it is crazy how some areas have such a large supply of new units.

I can’t see why a well located large older walk up wouldn’t do well over time, probably not as well as a freestanding house but still well.

 

Absolutely, I can only think of a few suburbs where I would purchase a ground floor only unit. And I have a strict list of criteria listed below . My list from # being best and most immune to falls, or most likely to stay in demand and experience growth over time. - I personally wouldn’t buy a unit outside of these 5 suburbs in Brisbane.

1. New farm
2. Tenerife
3. West end
4. Hawthorn
5. Bulimba

Criteria
No lift
No pool
Smaller than 8 complex on one block
At least 80sqm.
No 1 bedders
Ideally brick or older than 10yrs old.
Ideally courtyard.
Add value potential, IE good layout but unrenovated.

I personally think if you get all this right. You would do well in time

 

Thanks for this. Only looking at brick and older, it's more just a question of the suburb/street as I've been reminded.

I know Brisbane fairly well, but what I don't know is what areas will get 'built in'. I know the obvious ones to avoid, those with the high density zoning (e.g. Woolloongabba, parts of West End). But what I don't know, is how to pick a good area based on other zoning. Most of the units I find are in a LMR zone (low medium res, up to 3 stories).

Is this sufficient or should I aim for character residential?

And how does one tell if an area will or won't be 'subsumed' by MDR/HDR? Is it based on how well the residents can defend the area, e.g. the desirability of streets, number of renovated Queenslanders with street pride and residents to lobby for/defend them?

 

You can also find a lot of LMR 3 story blocks that were built before the changes happened and may only be a ground floor 4-6 unit complex on a 800sqm block with a huge land value. However is well Under utilised. Hard to see going wrong on this sort of thing.

 

I had an IP in Vine Street Ascot, which I sold and it wasn't a good investment. 1970s 2 bed 2 car, and I thought it would achieve good capital growth due to the blue chip area, but it didn't. However, if you have a strategy as a PPOR, and have an understanding that a unit may not get the same capital gains as a freestanding house, you are going in with a clear goal. My only suggestion is that you might want to reconsider

I have just bought a property for an IP that is low 300K in a good area in Redlands, very close to Manly, needs a reno, but will still be under the $350K after the reno. There are houses around that 300-400K that aren't duds, in better areas, but it takes time and patience to find them, a bit of luck, and some good negotiation. Yes, I agree, you still have to be very careful when buying houses, there are areas that I wouldn't touch, and as a PPOR, you want to live somewhere that is appealing and meets your needs.

 

You can have decent capital gains with units. Like houses, timing is often a matter of luck. For two units we owned, we almost tripled our money in ten years.

Look at Coorparoo and Greenslopes. There are unit blocks in leafy residential streets that mainly contain houses.

With the older 6-8 packs, most ground floor is parking or driveways. Go for the first floor for fewer steps. Look for bigger floor areas, views, away from street noise and a lock up garage. Check for a tidy, well kept building. Unpainted face brick is best for checking structural soundness.
Marg

 

I recall you saying it’s worth 3x what you paid for it? Averaging about 5% PA. I would also argue ascot isn’t the right suburb for a unit and is blue chip for houses mainly.

Conversely I personally wouldn’t touch Redlands as it’s too far away and has no walkability, at the OPs budget it would require going 20km + out which he has all ready mentioned isn’t an option, as well as not wanting to turn this into a house vs unit debate.

 

South East Qld Sales - The Public Trustee of Queensland

This site is always gives a base line on sales within Brisbane..imho..

 

Very good points Codie!

If I could just add another criteria to the list - ideally sitting on bigger block of land like 800sqm+. Each LOT will therefore get bigger allotments

Cheers,
David

 

Exactly right.

If I can give an example (not to detract the topic) I am about to settle on a purchase as you may have read in other posts.

My main consideration for this unit was all of the list above, but the main factor was a brick complex of 5 ground floor, when checking the land and zoning this block is 809sqm and zoned up to 3 stories, the land value alone is 2m - however each apartment has sold for $440k approx. I managed to secure the biggest one at 127sqm for $412k.

If you split the land value by the 5 apartments its $400k per lot alone, which I'm pretty sure you couldn't replace the units for $12k

 

Are there any suburbs outside of these you would touch - or are these the only ones worth going for?

Also, how did you gauge the size of the overall block, was that in a paid title search?

 

I would add also much smaller complexes of say 2 or 3 or 4 units, so one day could buy out the other owners too?

 

I personally believe brisbane hasn’t really accepted the apartment market just yet, like Sydney has for example and Brisbane is decades behind, not a bad thing, just something to factor in your expectations for growth & timeline.

Reasons for these 5
Demographics
incomes are higher and more affluent
Land is scarce and very expensive
Walkability - cafes, restaurants, bars.
Proximity to CBD and higher paying jobs
Disparity between unrenovated & renovated (this is a big one for me, I find wealthy people spend more time working & less time fussing over the cost to renovate and pay people to do it, this gives you opportunity to get in and add value smartly to create equity)
Rent very easily
Low density, no high rise (except west end)

I find very little negatives to these suburbs & seem to always be in demand but would welcome any other opinions. I think these 4-5 haven’t done much because Brisbane hasn’t done much. They are fantastic area’s however & in some cases actually cheaper than suburbs further out so represent good value at this stage


I have limited it down to these 5 for me personally and to be honest west end could actually be cut from it as prices are all ready high and there’s a lot of density there.

If I had to stretch the list, I’d consider Paddington, Red hill, kelvin grove, newmarket, Coorparoo, woolangabba (be very careful, high density, but lots planned in redevelopment here) and would have to be at the right price with add value potential.

Yes I gain a simple council report, or check every site online till find what your after, RP data also. Good luck!

 

Some poor advice on this thread, some of these areas that have been mentioned (same type of property that you are targeting) are selling for less than several years ago. Do your own research, including trends, plenty of data available. Everyone has an "opinion", but you need to get on the ground and do some proper DD. Good luck, you know Brisbane, so use a bit of local knowledge, doesn't take much to go to open houses, speak to REs, look up recent sales etc. How long do you want to wait for some decent Capital growth?

 

Yes, the Ascot unit was a poor investment, a lesson I haven't repeated. But good luck with whatever you buy, there is a reason why units are cheap.

It isn't about what you wouldn't "personally touch", it is about what your goals are, and mine certainly isn't to hang around for years in the hope that a unit will deliver. Along with other data, "The unassuming Brisbane bayside suburb of Thorneside tops the list of the best performers in Queensland, with homeowners there pocketing close to $1500 a week on average in the past year just sitting on the couch"- pays to do your homework.

 

If you actually read the OP’s original post, it clearly states his goals, A PPOR he can pay off quickly, specifically a Unit. And even mentioned does not want to get into a house Vs unit debate as understands houses out perform. That’s not what this is about but you have once again come here to argue a point that isn’t there.

The OP has decided on a unit, I’m just offering the safest advice possible if he was to purchase one in Brisbane. I also wouldn’t call your ascot purchase a dud, increasing in value X3 would suit most people fine.

Please stop de railing threads that don’t suit your agenda.

 

You can add Paddington to that list. hardly any units in that suburb at all and due to tightly enforced character controls there there's not likely to be many in the future

 

Yes Cate. There are few keyboard warriors on the forum.. It is very hard to comprehend anything based on some comments unless the reader know individual’s skills. I have been here few years, but still struggling to follow up everyone... Now days I only read the comments of the people I am aware of they are real investors and sensible posters...