QLD Brisbane will get more popular?

Discussion in 'Where to Buy' started by Realist35, 9th Apr, 2017.

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  1. Realist35

    Realist35 Well-Known Member

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    Hi guys,

    Just something I thought about today so was wondering what everyone else is thinking.

    I'm currently struggling to get a loan for IP3 due to all the changes in banking regulations. My only option might be Liberty (so I'm thinking to cancel everything). However I'm certainly not the only one, I suspect many many investors are facing the same issues.

    Investors comprise 40% of all home buyers in Australia. Large portion of them that are currently playing in expensive Sydney and Melbourne markets won't be able to get finance anymore due to low yields and expensive housing, so they'll look elsewhere. They will look to the next best market with lower prices and higher yields to meet the lenders' requirements. Brisbane ticks these boxes and it might become more popular, and more expensive.

    What do you think?
     
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  2. Kangabanga

    Kangabanga Well-Known Member

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    I think not...
     
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  3. gman65

    gman65 Well-Known Member

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    Hmm, last Brisbane boom was driven I think because other state economies were suffering. 2002-2005 VIC + NSW were not doing well, yet SEQ was booming economically. Not sure we are there yet. Finance seemed less of an influence - we are talking pre GFC after all.
     
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  4. Realist35

    Realist35 Well-Known Member

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    Thanks for your comprehensive reply.
     
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  5. Kangabanga

    Kangabanga Well-Known Member

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    We just got hit by cyclone debbie, coal mines are ok this time round but around 5 weeks delay as coal lines to ports to be repaired. Investor sentiment will be affected to some extent even though Brisbane wasnt hit directly. banks might be more reluctant to finance in QLD and investors may have to pay more for insurance.

    Local state economy not so flash and state gov will probably have to delay some planned infrastructure spending to help with repairing the DEbbie damage.

    Apartment apocalypse happening here in Brisbane too, just like its happening in perth now, another drag on rentals.

    And we also have rising unemployment, rising interest rates. And from recent trade figures aussie exports are up a bit but imports(consumer spending) are down quite a bit.
    Aussie dollar drops below US75¢ as iron ore plunges in told-you-so rout

    You can check out corelogic price rises for past half year, market has slowed down even for houses.
     
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  6. Whitecat

    Whitecat Well-Known Member

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    I believe what you are suggesting will have an impact. Bne is incredible value. Investor interest will contribute but migration and local wages growth are needed also.
     
  7. Sonamic

    Sonamic Well-Known Member

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    An excellent reply for 3am. :D
     
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  8. radson

    radson Well-Known Member

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    41,000 people net moved to brisbane last year and increasing.
     
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  9. Sonamic

    Sonamic Well-Known Member

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    I (maybe foolishly) believe that we in SEQ will not see a boom the likes of 2002-2005 perhaps ever again. Many values doubling and then some in such a small space of time. Not in all areas, granted. Many more appartments are coming and may allow more to buy in who can't afford local house prices. My BIL is working 15 storeys into a 90 storey appartment building, the tallest "residential" building in the Southern Hemisphere it is said.

    We shall wait and see what the future holds.
     
  10. kierank

    kierank Well-Known Member

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    Yeah, I made a prediction like that once.

    In 1992 (from memory), we were on holidays in Fiji. It was just after an army coup and they were trying to re-build their economy. In Nadi, we walked past a Westpac Fiji branch and it had housing loans at 6%.

    I 'famously' said to my wife: "We will NEVER see interest rates like that in Australia".

    She reminds me of my prediction at every opportunity.

    Morale of the story: NEVER say NEVER.
     
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  11. JDP1

    JDP1 Well-Known Member

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    As long as underlying jobs, infrastructure and economy is decent (which it is in Brisbane), thus can support increases in population and this in turn will entice companies to invest more to serve (and make a profit of) the increased population. Happened and is happening in both Sydney and Melbourne.
     
  12. Sonamic

    Sonamic Well-Known Member

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    That's why I covered my tracks with "perhaps ever". ;)
     
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  13. wombat777

    wombat777 Well-Known Member

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    One approach is to take a region-specific view. Don't look at the broader Brisbane market outlook/sentiment but try and pick the market segments, suburbs and council areas where government investment is occurring and there are signs of and stimulants for growth and gentrification. Research is key.

    Edit - adding to my post

    I like the last paragraph in this article:

    In short the secrets to housing markets are formulated by an educated guess.

    Market View: Is it possible to predict price growth in suburbs?
     
    Last edited: 9th Apr, 2017
  14. kierank

    kierank Well-Known Member

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    I was more focussed on 'maybe foolishly' :) :).
     
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  15. Scott No Mates

    Scott No Mates Well-Known Member

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    At what point will Brisbane cease being a country town influenced heavily by regional activity eg mining boom (boom/bust) and progress to the traditional cycles?

    Is that linked to population size or business?
     
  16. kierank

    kierank Well-Known Member

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    Yeah, I will make another prediction.

    I am not an economist but ....

    Apparently 10,000+ people retire every week.

    Any one retiring in Sydney/Melbourne with $1M to $2M equity in their PPOR will sell up and buy a nice place in the 'fuddy-duddy' capitals like Toowoomba, Bargara or Hervey Bay (all in Qld) for $300,000+. After selling, relocation and buying costs (allow $100,000), the balance would be $900,000 to $1.9M.

    Up to $1M per couple could be contributed to Super. If they had the average Super balance for a couple of $400,000, they would now have $1.4M in Super. At the minimum mandatory 4%, this would result in a tax free pension of $56,000 per year. Not a bad income in fuddy-duddy ville and better than the Aged Pension.

    These folks won't be working and will be straight consumers. They will create jobs in these areas.

    These jobs will drag other people to these areas, demand will increase, property prices (in Qld) will increase.
     
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  17. Inov8ive

    Inov8ive Well-Known Member

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    Any stats to back this? I personally don't envision Sydney or Melbourne retirees heading to Toowoomba in droves? I mean why? Sunshine Coast or Gold Coast I could understand but what's in Toowoomba?
     
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  18. HUGH72

    HUGH72 Well-Known Member

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    Sorry but it was the remnants of a cyclone otherwise known as a tropical low. It was a rain event, the kind that happens regularly and always has.
    It helps to keep dams at viable levels to supply a population of 3 million plus in the south east.

    I respectfully disagree.
    Highly likely.

    Agreed, rents will most likely be under pressure later this year.

    Definitely seems to be the case, I think the chain around investors necks has been tightened significantly and many cannot borrow as they once did. Add to the mix media coverage around negative gearing and CG tax changes and this will slow growth over the next 12 months.
    The main positive I can be is improved population growth into SE Qld while much of regional Qld goes backwards.
     
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  19. JDP1

    JDP1 Well-Known Member

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    Both population size and business activity... And they both are complimentary to onranother. Brisbane and bcc in particular is not that reliant on mining. Definitely to a degree yes it still is no doubt, but it has enough non mining yo hold its own.
    It's been diversifying from mining for the last 5 plus years, and has made good progress thus far, and judging by the things in its pipeline, will continue for the next 5-7 years at least.
    This will also attract more people and this pop growth will also spur companies yo invest in new projects yo service the higher population. Conversely, the development and projects in its pipe will attract the population. It works both ways and Brisbane needs both and is making strides yo get both (it's work in progress)..
    I'd say it's about 7 years away from shunning it's mining town reputation. if it reaches 3 Mil in its own right, excluding gc and sc, then I don't think that will classify it as a country town. It will be tough for anyone to say (perhaps with disdain like sydnrysiders and Melbourne's currently do :)) that Brisbane is a mining outpost if it crosses 3 Mil.
     
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  20. Kangabanga

    Kangabanga Well-Known Member

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    That's does not seem accurate based on ABS stats. The 41,000 is population growth not net migration.

    3218.0 - Regional Population Growth, Australia, 2015-16
    ESTIMATED RESIDENT POPULATION
    Greater Brisbane
    2 349 699
    41 135(growth)
    1.8% (% change)

    3412.0 - Migration, Australia, 2015-16
    Qld
    Net Interstate Migration (NIM) 11 581
    Net Overseas Migration (NOM) 20 019
    Net migration 31 600
    So net moved to QLD was 31600(with interstate net being 11.5k), some of which would have contributed to the 41k figure, and some of course some from within the state and also just the local population growth.

    I wouldn't call 1.8% change per year as spectacular, more or less in line with GDP growth 2-3%. NSW net migration was double and Vic almost triple of QLD. Also for all NSW/Vic/QLD, big gains were mainly from overseas migration.

    Yes Brisbane prices are likely to continue their slow steady rise and there is plenty of value around. But will the market boom in the short/medium term? looks like more negative factors this year than positive, and investing here could end up a VALUE TRAP.

    Based on the info above, Vic is the one with the biggest population gains and Greater Melbourne in particular with highest (2.4%) gains. Would think that in the near future at least these will have the better local economies and house price gains as a result of population growth and probably more jobs attracting people to settle there.

    largest population growth
    1 South Morang Greater Melbourne
    ERP 64 354
    Change 2015-2016 4 971
    % Change 8.4%
    2 Cranbourne East Greater Melbourne
    23 901
    4 956
    26.2%
    3 Craigieburn - Mickleham Greater Melbourne
    52 848
    4 491
    9.3%
     
    Last edited: 9th Apr, 2017
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