QLD First property in Brisbane with BA help - need suggestions

Hi guys,

I'm looking for some help with my situation.

Background – We are a couple with a 1 year old baby, working and renting in Melbourne CBD from the past 6 years. We both like city lifestyle and wish to continue living in the city for the next 3-4 years.

Recently we started looking to buy our first property ever and thought of starting with an investment property which would appreciate well in next 5-7 years so we have some equity to purchase our PPOR or next investment property.

I have not done any property purchases so far and have less confidence to purchase on my own.
Therefore engaged services of Metropole (Michael Yardney's team) to help me with first purchase as I have been reading their blogs and listening to their Podcasts from last 2-3 years and liked his idea of buying in a well established suburb, with good demographics with a view to have capital growth. His idea of avoiding new houses,house & Land packages or city apartments also resonated with many senior members here on Propertychat forum which gave me some confidence in his idea of property selection.

Another thing that was suggested many times in this forum is to avoid enaging services of advisors who have vested interests in the properties they show (e.g selling
high deperication property , OTP, have tie-up with developers to sell new properties), checked and found Metropole do not have such tie ups and theysearch properties from market that suit their clients only (according to them).


We have a budget of 850k and in our recent intial dicussions with Metropole Property Strategist, she gave us a hint that with our budget it would be a good idea to:

1. Look interstate and not in Melbourne as we might be a bit under budget for Melbourne esp for the type of properties that Metropole look for. Her suggestion was that in Melbourne with that budget we may not get a good house in well established locations. In case we insist on Melbourne, she said we may have to settle for an Unit or a Townhouse

2. In interstate she suggested Brisbane and said in 850K we will get a very good property in an affluent suburb. This will result in good capital gains in future and will allow us to purchase the next investment property. She also said rental yield will be higher in Brisbane.

3. She further said their analysis suggested Brisbane is poised for capital growth and when compared with Melb or Sydney their expectation is it will outgrow them. Now whatever little I know about property market from reading forums, tracking auction results, realestate.com & domain; I have always focussed on Melbourne suburbs since I live here. I have never been to QLD and have never tracked that market therefore unsure on what to do.

I need your inputs/ insights on whether it will be a good idea to buy in Brisbane. Do you guys see Brisbane offering good capital growth in 3-5 years?
Does it makes sense to invest in a state/suburb which I don't know at all?
Lastly does anybody has any experience with Metropole?

I guess in the next few days Metropole will ask us to finalise our decision so that their buyers agent can start looking. Any insights/ thoughts from this experienced forum will be so much appreciated.

thanks,

 

Definitely not an expert just an amateur. I am sure you can see around 100k profit in next 5 years if invested in right suburbs within 10 km of Brisbane CBD.

 

I'm biased because all my property is in Brisbane. With your budget, you'd better move soon if you want anything decent in Brisbane. Suburbs within 15-20km of the CBD are selling like hotcakes!! Agents keep complaining to me that they don't have anything to sell.

I can't see Brisbane doing any worse, %wise, than Melbourne over the next 2 years. I'd be happy with Metropole's advice. I do read their daily news sent by email. Metropole's investment philosophy does match mine. A thread was set up in the last months on them. Quite a few posts but can't remember where it is . Use the search function to find it.

 

thanks Brad England, I hope the same .

 

Thanks nth brisbanite, yes I'm trying to get onto the property ladder asap however depends on how quickly my BA finds property that suits our need. Metropole did said that in next 2-3 years it is likely to outperform Melb. Hoping it does and gives me equity and confidence to go for the next purchase down the line. Do you see Brisbane having better rental yield too than Melb?

Also I was checking domain for auction results and was surprised to see the number of properties that were listed in QLD (under 100) vs Melbourne (around 900) for last week. This gave me the feel that Melb even though expensive is quite active in terms of number of properties listed & sold thereby property value rising rapidly. It may be due more employment opportunities/higher immigration in Melb vs Brisbane. I know it is not like to like comparision but I started thinking with much lesser properties to sell it will have much lesser competetion and probably slow movng market. what do you think?

 

Shveta, rental yield? Overall, yes, it is better but there's an old saying in real estate investing - 'there are markets within markets'. You'll find that there are better yields in some parts of Melbourne and vice-versa. Impossible to answer for individual cases.

Auctions, immigration and employment opportunities are no indication of how active each market is. Auctions are a way of life in Melbourne but not so in Brisbane. Plenty of employment opportunities here in Brisbane with many new projects planned or started. There are no overseas migrants coming into any state in Australia. Queensland has plenty of interstate migrants coming here though. The number of properties for sale as a percentage of the population goes through phases. Sometimes it's higher in Melbourne, other times Brisbane.

My advice - go for it!! Don't procrastinate otherwise the market may get away from you. If you're holding long-term (at least 10 years), it may not matter in what capital city you buy in. If you are buying short-term, who knows what's around the corner?

 

thanks nth brisbanite

 

That advice you summarised seemed spot on. I'd say go with it and follow their advice.

Brisbane market is hot, so when you find a property that ticks the boxes go with it. Also asbestos is a way of life in Brisbane, so don't let that put you off a property. Look at the flood maps, don't risk it. I'd also inspect retaining walls as Brisbane is very hilly and when it rains, it rains. Don't want to be having any kind of water issues.

Be aware of cross river rail, Brisbane Metro and Victoria Park (although the later might be a bit irrelevant for your budget as the areas surrounding are largely above it for free standing houses). Oh yeah definitely go free standing houses in brisbane.

 

thanks Adedy..had no idea about flood maps, asbestos ,other points you mentioned here for Brisbane property. That is why we think enaging BA for interstate property purchase makes sense. Hope he does his job right and do due dillengence

 

Ok so pretty much everything you said in your original post is correct and you've obviously learned a lot even without having bought any properties yet, the only point that people might have a bone to pick with is buying "blue chip" areas only. I know it's one of Yardney's pillars of investing, but there's a lot of data to suggest this is a bit of a flawed concept. Otherwise it seems like you have a very good grasp of the way forward.

 

@Shveta , Can I ask about Metropole process? Are they mentors only, BAs, both? What are they charging for each service (e.g. how much for just BA)? Have they narrowed down areas in BNE for you yet, and if so, which ones based on what budget? We're looking in that area as well and some of the Metropole recommendations are outside our budget.

Thanks,
D3