QLD Brisbane vs Adelaide vs Melb/Syd?

I read a lot about buying in Brisbane or Adelaide, because the growth potential is greater in the shorter term than Melbourne or Sydney, because they have just had their spikes.

But what I don't understand is, but then what?

The historical growth for Adelaide and Brisbane is quite a bit lower than that of Melbourne and Sydney, so why would you purchase somewhere in those areas for the short term growth?

Eg. if Adelaide/Brisbane is going to be 10% growth in the next couple years, but then go back to the standard 5%, why do that instead of buying in Sydney/Melbourne where the average has been 7-8%?

Is it because in Adelaide, for $500k, you can buy somewhere that will average 7-8%, whereas in Melbourne the $500k place would only be 5% growth?

 

Because Adelaide is safer

 

Its mostly because serial investors will chase the wave so to speak.

If you invested in Sydney only, you might get 10, 20, 25, 5, 0, 0, -10, -5, 0, 0, 10, 20 percent growth so over consecutive years whereas if you were willing to invest anywhere you could capture the 10% year every year across every city. No one has a crystal ball though, you have to go with your gut.

See also Sash's thread bout building portfolio impervious to market forces.

Alternatively, don't use strategies that rely on capital growth. You could look into renovating, developing or positive cash flow. There's literally something for everyone.

 

In the 10yrs preceding the Sydney/Melbourne booms EVERY capital city averaged something like 7-8% over that period.

In fact during that 10yr window Sydney was the worst performing capital city of them all.

The belief that Sydney/Melbourne will outperform all the other capital cities in the long term in terms of percentage growth is, I believe, wrong. If another capital city improves its economy/jobs/infrastructure there is no reason why it can't outpace Sydney/Melbourne, because it would attract people due to affordability of real estate.

 

Hi, What these informed gamblers are doing here is trying to catch 50% or more growth in Brisbane/Adelaide in the next 5 years os so, rather than the 10 or 20% growth, if lucky, in Sydney( not sure about Melbourne). They will come back after 4 years by way of selling or redrawing.

 

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Yes this is true however it aint easy to have the economy and jobs thaf the southereners have. The lower buy in price in brisbane/Adelaide reflects that. The key is sustainavle long term economic growth. I cant speak for Adelaide but brisbanr does seem to have this sustainability via infra developments, new industries that are projected to be over the next 15 years or so. etc.
Unfortunately for most brisbanites gthis realisation wasnt there 5-10 years ago...the politicians only just realised it in the last 3-5years..

 

As a local SE QLD, Im not sure how Brisbane will turn out. The usual unit/apartments developments are slowing starting, however perspective of growth isnt no where to be seen. There are too much concentration on resource sector related jobs as well as government related jobs. Both have reduced significant amount of employees and as everyone would agree, economic future for resource industry is not very clear.
Infrastructure wise, roads are heavily congested due to significant high costs of public transport (previous state governments raised the fee 15% yr after yr, and stopped), now some news are coming out that companies are salary packaging the transport costs to their employee.

Pay is significantly lower, cost of living is identical or higher than Sydney, (other than price of house)

State Government is always asking for more $ from the federal and even now, cross river train line has been just discussion, and nothing firm (as a result southern-line cannot increase its number of trains)

I have not seen any significant job growth nor salary growth, growth of SEQ for past 5 yrs has been some what dismal. Only big time spender is Local Gov or State Gov with infra projects.
I doubt any growth is sustainable with spending by the gov.

I really love the region, not crowded like Sydney, people are more relaxed, but at the same time just like Sydney, capital gains are not because of local growth but flow of capital from interstate or overseas buyers.

 

Actually the long term historical growth rate is the same between Sydney Melb and Brisbane. But Brisbane is more slow and steady and also the cycle starts later than the Sydney and Melb cycles. Now is defiantly the time to buy in Brisbane for the best gains over the next 5-10 years the reason being the lag behind Sydney and Melb in the cycle. Also there will be a really big positive overlap as all of the publicity and growth that is starting in Gold Coast starts to pick up and benefit Brisbane over the next 5 years.

 

Yeah..i would agree with this. Its a fallacy to say seq does not have long term fundamentals that warrant sustainable prices. Perhaps not as good as syd/mel but thats also why seq is significantly cheaper than southern rivals.

 

Cheaper. And more importantly much better yields. In the the case of Gold Coast at least also much stronger long term population growth outlook.