Has sentiment changed on Brisbane Units/townhouses

Hi All,

Looking at purchasing our next property (3) and are very close to placing offers on a townhouse/Unit (ground floor with huge courtyard) over in the suburbs of Bulimba/hawthorn - Brisbane

I’ve personally always advocated that house & land is the way to go in Brisbane, however I’ve always felt you might do Ok in the A class suburbs providing it has some land component and is not high rise at all. Walk up preferably

I notice yields are fantastic on Unit stock right now, prices are cheaper than 10yrs ago and a lot of places are $50k under last sold price. I don’t see how with yields this good, we could go much lower and am hoping we may be at the bottom.

Part of my thinking on this purchase is a PPOR for at least a few years anyway so the location/easy living comes into it.

I would love to hear some thoughts from long term Brisbane investors as I haven’t even seen 1 cycle let alone 2-3

 

Bought my first house in Brisbane 30 years ago, seen a few cycles. No, I wouldn't buy a townhouse/unit- even in Bulimba/Hawthorne. I had a unit in Ascot years ago, a bad decision for CG and sold it in the 90s! So historically they have been a poor investment. Yes, they are cheap, because there is a glut of them. IMO, you would be better with a house, regardless of your budget- even in what could be described as a B class suburb. I have properties in the middle ring and a contract in the Redlands (under land value)- all house and land. Go in and negotiate hard, it is a buyers market.

 

Thanks for the Advice Cate, looking back at what you bought the Unit for, do you know what it would sell for today vs what you paid? I’m 28 so have around a 30yr timeline in my head.

I own middle ring as well 9km out, house and land and totally agree with your comments.

My thinking with this one is only having a budget of $400k, wanting to get another property under my belt before we go down to 1 income, and also considering a place I want to live.

My other option is rent where I want to live, and purchase another IP further out at the $400k mark.

 

I just had a quick look at the unit, Vine Street Ascot. Seems like it would be around $390. I purchased in 1993 for $102. I bought a house for $130 10km from the city in 1991 and it is around the $710 mark (spent about $40k on it- not much), I still own it. I have a contract on a house in the Redlands- needs a lot of work, but for $310 on 600m I think it will do better than a unit in an A grade suburb. The unit at Ascot needed underpinning, so I think we had to pay about $6000 in special levies, a lot back then. Well done for buying young, my 2 cents, buildings depreciate, good land is what you are after. Buy and hold has done us well, the unit was a disaster, it is all in the negotiation, $400k is good, find the right agent, the right seller (who wants to do a deal) and the right house and you have the recipe for success- well that is what I tell my son in his 20s.

 

Just to clarify, the $310 property that I have a contract on is trashed, and requires a lot of work, more that I would usually do- however, there are properties in the $800k in the street, so I will do enough to rent it out for the near future. My budget is around the $40K, it does need a lot of work, but it will then be valued in the $500s- the worst house in one of the better streets. While I like the buy and hold strategy, you still need to buy well and have an upside.

 

So almost 4x in 25 years. About 5% growth? But thats with brisbane flat for a few years now.

Not the best return, but the initial investment might be 30k. Sell it today you get maybe 280, 290k before tax after paying out the original 80k mortgage. Not bad.

 

It was a terrible investment compared to the other properties that I bought around the same time. Also remember, that when new units and townhouses go up, your property is difficult to tenant. The Ascot property had a large turnover of tenants- I don't find that so much with houses. But if lifestyle and location is really important to you, it might be worth prioritising what is important. I think units have a bit of a way to fall, I don't think it is the bottom of the market.

 

Thanks you have confirmed my own thoughts, i have emotion in this one since its a PPOR but not long term so need to keep the investment hat on to some degree. Back to the drawing board on suburbs!

 

I am liking around Birkdale, Thorneside in the under $400 if you want to stay that side of the river. Can get a good size block, 3 bedroom older house near the water and rail- with plenty of renos and new builds in the area. If you can get under $400 in a street with new builds (worst house best street scenario), it is worth considering. Redland council rates seem a bit higher (even though they include water). I target several areas at a time, there is certain to be a good buy come up in one of them, if it is only your PPOR for a short while, and your strategy is buy and hold, best to keep that investment hat on. Good luck, would like to hear how you go.

 

Funny you mention that, i have been looking there in the last couple of days as well and went for a drive there last night to do some drive by's. There is a couple 800sqm corner blocks for low $$ over there, however i must say the drive out there was quite far, i consider that miles away from Brisbane. i think i would sooner save another 12 months and buy a renovator northside around Everton/stafford heights again - 15-20min to CBD/southbank on a normal run.

How do you find demand for rentals over that way?

 

This is my first buy on the southside, all my other properties are inner northside, out to Chermside West and Albany Creek- so max about 10-12k. This property has been rented for $340, and I am paying $310, with a reno, should get around the $400. I think the one I have got under contract will rent really well, there isn't much in that area, it is close to Manly and the water. Yes, I thought it was a long way out, but then again, if you have properties in the 2 million plus, and properties selling in the $800s in the street, well I don't think you can go to far wrong. I don't just look at the suburb, but also the street and what is tightly held. I would do some searches on the street. I bought a property 11 years ago at Albany Creek, not a suburb that most people would consider great, but when it is the best street in Albany Creek and you buy at $455, when others are selling at that time for double, you can't go to far wrong. The Albany Creek property has done extremely well because of the neighbours spending habits

 

Hi cate!

I am really enjoying your insights. Having just purchased our first investment we are keen to do more. What suburbs are you intersted in in Brisbane if you don’t mind sharing. Thanks so much in advance

 

@The lucky duck as you just revived an old thread thought I’d share, I did end up going for the above purchase against cates advice, and 6 months later the suburb has been the best performing unit market in Brisbane with a $100k increase on valuation after a small renovation.

 

Wow! Go you! This was number 3? Where did you buy?