Home appreciation rates - Brisbane

Discussion in 'Where to Buy' started by BillieJean, 10th Feb, 2020.

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  1. BillieJean

    BillieJean Member

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    Hi all,
    I'm moving to brisbane this year and running some numbers to see if it makes sense for me to buy or rent. Does anyone have an idea of the average home appreciation rates for both condos/apartment units and townhouses in Brisbane?

    Thanks
     
  2. wylie

    wylie Moderator Staff Member

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    Brisbane is a big place with so many different markets. Any idea of location?

    I can't help with this stuff, but others may be able to with a bit more detail.
     
  3. BillieJean

    BillieJean Member

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    sorry i forgot to say..inner ring for townhouse Paddington, Bardon, Taringa, Toowong
    For a unit it would be in the CBD (SB, Kangaroo Point, West end etc.)
     
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  4. Sackie

    Sackie Well-Known Member Premium Member

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    It almost always makes sense to buy if you get a good value deal in a good area which you can afford.

    Edit* I'm referring specifically to homes in Brisbane.
     
    Last edited: 10th Feb, 2020
  5. Archaon

    Archaon Well-Known Member

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    Is Brisbane still well over supplied with units atm?
     
  6. sash

    sash Well-Known Member

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    The rate of appreciation of units has been about 1-3% over the last 5 years but it is picking up as house in the inner ring has moved.

    For example...you can still but a unit in Annerley for low 3s. The rent there would be 330pw. So oyu are paying about $17,160 in rent.

    If you bought the same unit with the grant and got stamps for free. Lets say you have a 280k mortgage over 30 years. At rate at 2.89-3.1%. You will pay about 14k for P&I interest, strata on walk would be about 2k, water about 1100. ...rates another 1200. So you are paying about 18,300.

    So the difference is only 20pw. I reckon rents are going to increase in Brissie so you should break even quickly and then its all cream!

    The land value of units are higher in walk ups of 6-12 blocks. As inner city land goes up so do the units. Typically units should be city at 50-60% of the house median. For example in Annerley...if the median is 700k...units median should be at 350k to 420k. If you are buying good quality well under this then it is a good buy.
    No any more in most areas over 4 klms. Stick to walk up units...not the expensive shiny ones.
     
    Last edited: 10th Feb, 2020
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  7. Sackie

    Sackie Well-Known Member Premium Member

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    Been to talking to a friend who is very much up-to-date with unit markets in Brisbane and he reckons supply is drying up, especially for smaller boutique walk up buildings. Personally, I would never buy a unit in Brisbane. Not even if it's a good deal. Would have to be amazingly spectacular for me to consider it.
     
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  8. Angel

    Angel Well-Known Member Premium Member

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    @sash, did you miss the bit where the OP wants to live in prestige suburbs like Paddington, Bardon and Taringa.
     
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  9. Angel

    Angel Well-Known Member Premium Member

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    @BillieJean maybe rent for six to twelve months until you get a better feel for what would suit you best.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Be mindful that with some lenders and finance, Postcodes and strata titles can be hit and miss especially at LVRs > 80 %

    Some lenders even need LMI cover at > 70 % lvr, though the lmi premium would be weeny.

    I say that because if u go and see lender X, and lender X says yes we will lend u the cash, but .........these are the rules, many borrowers will be told its an APRA thing, buy it hook line and sinker
    and get stuck with some structure or product that is less than optimum.

    ta
    rolf
     
  11. sash

    sash Well-Known Member

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    A bit more....but it will pretty much cover costs also.

    But then you can't have everything can you? ;)
     
  12. BillieJean

    BillieJean Member

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    Is that 1-3% in the cbd?
     
  13. BillieJean

    BillieJean Member

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    You are forgetting the opportunity cost of the down payment. A 50k down payment would return about 4k a year held in a broad market ETF, which suggests owning would be at a premium of $4640 per annum, based on the numbers/scenario you provided.

    Owning is usually always more expensive in most markets. Im thinking of buying for personal reasons I don't care to get into here.
     
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  14. BillieJean

    BillieJean Member

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    Anyone else want to chime into appreciation rates for townhouses in inner suburbs?
     
  15. HUGH72

    HUGH72 Well-Known Member

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    I heard this morning that the BBC is looking to push through legislation limiting new multi story unit and townhouse developments in over 61 suburbs which are currently zoned low density to protect their existing character. Could potentially help with any over supply problems in the medium term.
     
  16. sash

    sash Well-Known Member

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    Yep...but then you also have to look at the opportunity cost of rents in another 20 years?

    I can't see the down payment being 50k...if you use the FHB grant with a 5% deposit and reduced or no stamps.

    I looks like you need to do more homework on what you want to do.
     
  17. Gen-Y

    Gen-Y Well-Known Member

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    Are you sure?
    I am holding a place 7km North - LDR1 area and want to put a duplex no more than 10 years from now. I need to object this stupid legislation before it is too late.
    Any link you can share?
     
  18. HUGH72

    HUGH72 Well-Known Member

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  19. Patrick Bateman

    Patrick Bateman Well-Known Member

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    Hey there . You mention condos , are you from the states ? Do you understand the Brisbane market ? As sackie mentioned units/townhouses have a bit of a stigma here . If you are after capital growth you may want to consider a freestanding home ( in a small block of you don’t want too much maintenance ). What is your budget ? I am an expert in Toowong , Indooroopilly and Taringa do if you need any info on those areas let me know . Please see below for predicated growth over the next 2 years in Brisbane . You will note houses are forecast to outperform units in the near term .

    Brisbane house prices to rise over 2020-21: Forecast to soar by up to 17 per cent
     
  20. Tom Rivera

    Tom Rivera Property Manager Business Member

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    @BillieJean can I assume you prefer a unit or townhouse to live in as well, in that you wouldn't naturally compare a house and unit as different options available to you?