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Discussion in 'Where to Buy' started by Clairal, 2nd Apr, 2016.

  1. Clairal

    Clairal Member

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    Hi all,
    I noticed lots of investors are keen on Brisbane. I'm looking at options for a long term investment property.
    budget is 800k. One option is buying a house in Brisbane. Already have an IP in bne.
    I also see Sydney as a strong market into the future. Historically it has been less volatile than bne. So the other option is buy an unit in the eastern suburbs in Sydney. I dont own any property in Sydney.
    What are your thoughts and suggestions on Bne vs Syd?

    Cheers
    Claire
     
  2. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    As a general rule, buying in a flattening/declining market directly after the mother of all booms isnt a good idea.

    That being said, you may be able to pick up a decent buy from a distressed peak of boom buyer
     
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  3. Clairal

    Clairal Member

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    I see Sydney already came off the boom and may not rise as much as before but is there evident that Brisbane is going to boom? I'm not sure if in the long run, Sydney is still going to increase more than Brisbane because the demands are still strong. Still undersupply.
     
  4. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Tough call though with 800k you can only buy a 2br stock standard unit in Eastern Sydney. A few years ago that would have bought you a solid home in the Inner West. Houses will keep getting more expensive due to land content. Units should grow but not as much because they can always build more, and more highrise in the future at that. So if you go for a unit make sure its in a small block. If you can get art deco, do it. Or something with a garden.
     
  5. Azazel

    Azazel Well-Known Member

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    $800k will get you a nice house in the Inner North in Brisbane.
    Has been some price movement, take a look at the recent history to help you make a decision.
     
  6. Clairal

    Clairal Member

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    Yes but not like Sydney and is the demand there for it to grow over the long run like sydney?
     
  7. Azazel

    Azazel Well-Known Member

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    No, like Brisbane.
    Like Sydney? No. Like Brisbane? Yes. Brisbane has a population of around 2 million people. Sydney has a population of almost 5 million.
     
  8. Clairal

    Clairal Member

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    Hypothetically, if I bought an apartment in the eastern suburbs VS a house in an inner city suburb in Brisbane, how do you see the CG going?
     
  9. hash_investor

    hash_investor Well-Known Member

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    Eastern suburbs in Sydney has been blacklisted by some banks for apartment purchase. Does that give you some idea?
     
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  10. Jacob1

    Jacob1 Member

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    Hi Clairal, I'd say there are definitely long term growth prospects in Sydney though you may have to ride a few years of hardship holding the investment through the (possibly) looming correction phase. I would probably wait a few years before getting back into the Sydney market and this timeframe would be determined by many variables including but not limited to rates, infrastructure, fiscal policy etc.

    As you already have an IP in Brisbane have you considered diversifying and perhaps looking at certain markets within Melbourne? I stole this from an article I read recently :)

    Population Growth

    • Melbourne consistently has the highest population growth rate for any capital city – 95,000 new residents between 2014 and 2015.
    • Melbourne is set to become Australia’s most populous city in 2051, with 8 million people.
    Liveability

    • Ranked the world’s most liveable city since 2011 (and has been in the top three since 2002), according to the Economist Intelligence Unit.
    Demand

    • To accommodate this growth, the city will require approximately 1.6 million additional dwellings than those currently available. Greater Melbourne is projected to account for more than 80 per cent of the state’s growth to 2051.
    • Melbourne is a leading financial centre in Australia as well as the Asia- Pacific region.
    Economic Growth

    • Greater Melbourne provides the second highest contribution to gross domestic product after Sydney, and is home to the headquarters of four of the six largest firms in Australia.
    • Contribution of manufacturing to Gross State Product (GSP) decreased from 17 per cent in 1992 to 7.5 per cent in 2012, with professional and financial services increasing from 12 per cent in 1992 to 22 per cent in 2012. A knowledge-based service economy is less susceptible to volatility than a manufacturing based economy.
    • Between September 2014 and September 2015 Victoria recorded 3.4 per cent growth in GSP, the highest of any state.
    • Melbourne is on the Financial Centres Index of top rated centres of finance.

      Personally I'm a big fan of the affordability and long term growth prospects of areas like South Morang/Mill Park etc.. Whichever way you decide to go I guess my advice would be to not pay for the growth somebody else has made, which would be comparable to purchasing in Sydney at the moment. In saying that, if you find a bargain, go for it!
     
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  11. Clairal

    Clairal Member

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    Which suburbs are blacklisted?
     
  12. JDP1

    JDP1 Well-Known Member

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    Short term= house in inner bn
    Med term= close, but probably house in inner bn
    long term= even
     
  13. MTR

    MTR Well-Known Member Premium Member

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    I will go against the grain and have a look at what is happening today. I would buy in Melb over Syd and Brisbane.

    Melbourne is the strongest performing market at the moment in Australia, what is driving this market is immigration, number 1 for population growth, also FHB and investors.
    What is driving the other markets ??

    Though you will need to be selection now as the market has been strong since 2013. I would be targeting lower entry level, close to CBD and good infrastructure in place, areas which are on the nose with locals, some areas are under valued IMO.

    Sydney - its too late, its already boomed agree with Davem on this. If you think you are buying a bargain in this market today it could very likely be the opposite if prices continue to fall. Market sentiment has changed in Sydney, I see this as high risk at the moment.

    MTR:)
     
    Last edited: 4th Apr, 2016
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  14. big max

    big max Well-Known Member

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    Right now Brisbane wins hands down if you are after a capital gain. Sydney and Melbourne are close to "12'oclock" on the property cycle. Brisbane is around 7 o'clock. Brisbane for sure will give you a greater % gain over the next 5 years. (As you already have a place in Bris I would suggest you also consider Gold Coast which is poised for great gains next 5 years.
     
  15. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Brisbane. House. Something you can add value to. Winner.

    I know the eastern suburbs of sydney markets well and you wil be paying a large premium for units now plus it's just at or past the boom phase. Risk is at its highest imo. Worst time to buy. There are always exceptions but I wouldn't be relying on them.
     
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  16. Whitecat

    Whitecat Well-Known Member

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    Understand syd is coming off a boom.
    Where do you see syd prices heading?
    Do you think a long flat period?
    Do you see Sydney as being the strongest long term market? To me it seems that way with the weather, Harbor, beaches and international appeal. I haven't had much exposure though as I've been in the north of aust for quite some time and havent followed closely.
     
  17. Clairal

    Clairal Member

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    So you think long term Brisbane is going to rise to similar level of Sydney? E.g. A couple of years ago maybe you can pick up a house in north bne or an unit in Sydney eastern suburbs for the same price. Now the Sydney one is probably double the price but bne one has probably grown 30%-40%.
     
  18. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Your talking about long term cg but I'm just curious what about in the short - medium terms? Where do you get the equity/cash for further expansion? Unless your not looking to expand much or have a slower growth plan taking longer? All legitimate plans, I'm just curious.
     
    Last edited: 4th Apr, 2016
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  19. Clairal

    Clairal Member

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    I'm considering investing in Sydney also because I wanna keep the options open to move and live there in the future and I don't wanna miss out on opportunities there. I like the lifestyle of living close to the beaches. Not sure if the beachside suburbs are going to be over built with more units?
     
  20. JDP1

    JDP1 Well-Known Member

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    %wise, the lomg trerm stats have shown similar numbers between sydney and brisbane. I think @HUGH72 posted some stats on this in another thread..one of the issues i have with these stats as you have pointed above is the place in tge cycle. Ie currently, the sydney markkkwt has realised all its boom and at top of cycle wheras brisbane is further down the clock ...so ofcoursr bn will show less cg than sydney because it hasnt finished its cyclical upswing yet.
    Comparissons are fair if only at same points in cycles. Eg top in bn and top in syd...
    If the growth rates are compared at same points of cycle ie in future brisbanea top vs sydneys top and conpared to similar points in previous cycles then you will likely find similar %growth numbers between the two cities.
     
    Last edited: 5th Apr, 2016
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