QLD Brisbane - Woolloongabba VS Lutwyche for Appartments

First time poster and buyer seeking some advice! I'm a total property novice and I'm currently quite confused after narrowing a search for a 2 bed, 2 bathroom apartment. My wife and I are looking to use the first time buyer grant, so timely that this is rising to $20k in July. We've looked at not using this and buying an older place, but just don't like anything at those lower prices.

We're looking at a ground floor apartment located in Woolloongabba that has a 70 square metre courtyard with an 81 square metre internal space for $474k down from $499k (was listed at $484k but we offered lower and have been told it would be accepted). We were all set on this until discovering..

...an 83 square metre internal space on the second floor of a 19 apartment block in Lutwyche. There's a 25 square metre balcony. Available for $475k. The general finish of the apartment is of a higher quality, but less open plan - but we kind of like that because it feels more unique.

My wife doesn't like the ceiling in Woolloongabba and we're looking to change it to a gyprock ceiling with down lights, so that would be an extra expense, plus the outside courtyard is so big that we'd probably have to spend a fair bit on making it how we like - plus not sure whether the body corporate would allow it yet.

Both apartments are close to train and bus stations so no difference there.

Which of the two would you think is the better option to buy?

 

I'd probably say neither right now.

 

Ok...

What would change your mind on that? My wife and I are in our 30s and are tired of paying other people's mortgages. We have a feeling of now or never to get on the property ladder, but would still like to live in a decent place.

 

If it's your home then that's a different thing really. Generally go with the one your wife likes! Also look at East Brisbane? I'm voting Lutwyche.

 

Neither, a house further out but close to transport would be my suggestion if you can afford 475-500k.
Ground floor Wolloongabba, is it prone to flooding?
Unit prices are likely to go backwards inner city due over supply.

 

FOMO.
You should consider buying a house.
Probably won't miss out on a unit in the next few years.
But if a unit is a must, will probably be some bargains around for a while.

 

Yes. For that kinda money 475-500, i would look for houses further ouy or a townhouse closer in. Those would both deliver higher cg than near cbd units in the next 5 years.
OP- i would not have that kinda FOMO mentality; seeing as you both are from brisbane- there is a generous amount of stock here..

 

Clearly we've looked at moving further out but it makes travel time to work move to the hour mark. We only have one car.

Neither of us have the skills or money to improve an older house up to the quality of these two apartments. Also with an old house we wouldn't get the grant - makes a huge difference to us.

So I'd be really keen to hear which of the two places is likely to perform better, regardless of everyone here thinks we should actually move further out.

 

Ok, purely based on the question i'd buy Woolloongabba for the 70sqm courtyard. Much more livable if you have a child or 2 later. But also, any parks nearby? Also check for flooding. Dont worry about the look of the ceiling etc, that can be changed fairly easily. And you should be able to pretty much do whatever you want in your courtyard, its yours. Also, how much are the strata fees for each apartment?

 

500K for an apartment?

Neither. Too much coming online. The 20K will help, but you might pay 475 and have it worth 425 in a very short timeframe.

A 2 bed house on a small block just sold at auction in Greenslopes last saturday for 450k. (Edit: this one - 1 Drummond Street Greenslopes Qld 4120 - House for Sale #122622690 - realestate.com.au)

You've come for advice, mine is to keep looking and read every thread on property chat about Brisbane apartments.

And if I HAD TO, I'd buy in West End or South Brisbane where the lifestyle is already on the ground floor. But I still wouldn't - I'd buy something further out and rent it out, then rent the apartment.

 

Both properties are $3k pa for body corporate. This is a little strange actually as the larger building has a plunge pool.

Both have nearby green areas. It's Regent St in Woolloongabba and Florrie St in Lutwyche. Seems Regent St could be liable to flood. Also notice the Pacific Highway in front of Regent St, but the apartment with the courtyard is on the back and you can't hear it at all.

Does the large outdoor area have any impact on resale value? That's what originally drew us to that one but surprised no one has mentioned that so far.

 

The biggest effect on resale is how many others there are. There are 19 other apartments. Let's say, when the oversupply comes online, that someone has to sell. They can't. So, they drop their price 30-50k. This sets the new sales benchmark... and the whole block drops its value.

Brisbane facing apartment oversupply, says BIS Shrapnel

As an investment forum, most of us will be concerned about the same thing.

 

I've not seen any good sized 2 bed 2 bath apartments less than 450-500 in a decent close to the city area. That's where we'd like to live. In West End, where I work, there are some priced at 630!

450 is out of our reach if it's not new and we can't get that grant. Plus, if we don't live in it doesn't capital gains tax kick in?

If it's so obviously terrible to buy an apartment, why are there so many being bought at these prices?

 

The general forum opinion is that there will be a lot of apartments coming online soon in Brisbane. The 70sqm courtyard is a good point of difference - so if houses further out is not your thing and you can't get a townhouse or villa that fits the bill, this is the next best option. 70sqm courtyards are pretty rare, note I am a Sydneysider though. The 70sqm courtyard should be relatively low maintainance which is attractive to some. But it will always be considered to be an apartment and just be at the upper end of apartment pricing, it will never be priced the same as a house on land. And thinking long term, house prices will do better than units as developers can easily add more unit supply, but for houses you can only go outwards, or subdivide. The land component is really the factor that goes up in value.

 

As to your last line, I have no idea. But having personally bought at the peak of two markets before, not everyone has the nouse to seek advice like you have. It's a good move!

You will find fewer apartment investors on here, because of the issues of supply, body corportates and expenses, but also becuase the larger complexes dilute your share of the land ownership - and this is where your money is.

Have you talked to a good broker to see what your limit is?

There is certainly no rush with apartments. I'd like an inner city crash pad (except I live inner city already), and am waiting for the dust to settle in 2017-2018, for all the developers to have disappeared, and all the prices to be 50-100k lower than they are now on new stock.

A 20K grant is great, but make sure the property is worth 20K more than comparable older stock. The grant may simply put new prices up by 20K (or support a price 20K higher than market) but what happens come selling time? I think this is not a good long term strategy by the government, and will end up costing the purchaser 20K anyway.

I'd still rather buy an apartment in Greenslopes or Coorparoo than the areas you've mentioned, but Coorparoo may have it's own supply issues perhaps 2-3 years after the CBD. I think it's close enough to still be effected.

PS. I'm no expert. But I'm after capital growth, and Brisbane apartments do not feature anywhere on my list at the moment.

Let's see what some other forumites think

 

Far better option would be to buy a cheap second car or a place within walking distance to a train station.
The lack of cg or worse potentially for a new shiny inner city unit will most likely make it the least financially successful option.

In terms of what other people are doing I can't really answer, buying for lifestyle reasons only? Not everyone makes money in real estate.

If we are not looking at it from an investor perspective then I would be for the Woolloongba option. The commute to work would also be shorter.

 

Trying to be helpful here.

What would change your mind, some good advice from some people with experience?

If you buy a unit that's worth $50k less in two years you've not just paid a mortgage you've also paid the developers premium!

And just to complete your Aus property puns, ladders go up and DOWN.

The capital growth in Bris units has been poor recently and I would love to hear some thoughts on why that would change? Houses on the other hand have ticked along nicely.

Maybe invest in a house and live in a rented unit close to work.

Your thinking on the grant maybe fair but would saving for another six months achieve something similar short term and better long term?

I could be wrong, I have been before.

 

Only my opinion,but i would not buy anyone of those properties..

Woolloongabba if you went from stanley st for a walk along logan rd past deshon st and open your eyes to what will happen in that small area with all the multi unit developments then it's a pure numbers game..

But if you look in between balacava st up too buranda st and target one of those old queenslanders on semi large blocks with 4 split flats on each,even with the high entry costs if i was starting out again that's what i would target,rent the 3 out self manage which would cover some of the holding costs and let nature take it course..imho..

 

If you're going to be at your job for a long time and you really value modern conveniences then just pick the one you would like to live in the most. If at any time in the future you want to move, you will most likely go backwards financially or at best come out even. That won't be the end of the world, but it would be a shame.

If you want to make the best financial decision then pick neither - I think most everyone on this thread agrees with that.

You sound like you have a certain mindset about purchasing property and to me personally it appears a little closed minded at the moment. I can understand that though having been in a position myself where I almost made a dumb property purchase for my first property. I let frustration and desperation guide me, not patience. Thank god my offer was rejected.

I would sit back and read a bit more on the forums and understand that people here are not giving you advice because they can't see some amazing benefit that only you can but instead have most likely been where you are and either glad they avoided the same purchase or wished they had.

I say all of this without knowing your financial goals so if you just want to buy one property and live in it forever then buy whatever you like.

 

This post is gold. There's a lot of people who have made a dumb purchase, chasing shiny and new, at the start of their property journey. I was one also. Just like many folk do with their car purchases in fact.This forum can assist bigtime in steering you down a smarter pathway if you are of a mind to listen.
The other thing I would add is that sometimes people place giant mental barriers in front of themselves by thinking renovation work is not for them. Well you can contract the hard stuff out in many cases, room by room over time, and watch your asset grow. So the theme for the day is stop wanting to buy full retail price for property, and learn how to shop with a wholesale mindset, and you may well do better over your property journey.
As others have said, good on you for considering to other views, and good luck with your search.