HTW October review - are Brisbane units at top of cycle?

3 o'clock does not mean it will get better, it means it will get worse. It's heading south and won't stop falling until it hits 6 o'clock

 

Yeh wasn't thinking, 3 O'Clock is market in a correction. So Going to 12 O'Clock before 9 O'Clock would mean that they are predicting prices to be stagnant rather than fall and this period of stagnant growth wasn't preceded by actual growth. Is my understanding?

 

Yep. Absolutely.

And also locations can skip stages of the cycle or stay in parts of the clock for a long time.

 

Hi Euro

What are your reasons for preferring Perth?
What are the bigger population drivers?

Do you mean only Perth or SW WA?

 

will the oversupply of units in Brissy drag down the rents of everything, including houses, and will end this upturn prematurely ? I am not local and was thing to buy a TH in Brissy. Confused !

 

I don't think so. Houses and units are different markets with different demographics. Same thing goes for growth in houses vs unit markets in Brissy, cant all be lumped together as they are very different. Even all unit markets or housing markets cant be all lumped together imo. There will always be segments of markets that will outdo others.

 

Hi Leo2413,
You mean the tenants pool of investment houses will not, generally, be lured away to cheaper units rental properties ? For big families, they can not move easily. But for smaller families, can they ?

 

100% confident it wont.
Houses and apartments in high rises are completely different in the re market. Appeal to different demographic, different supply etc..evidence? Just look at Melbourne in the last 2-3 years...the houses/TH etc in good locations have done outstanding, and still doing well.. Whereas high rise units in southbank /Docklands etc have performed poorly.
Brisbane will be no different.

 

Thank you for insight, JDP1

 

HI @Kangaroo Its possible that smaller families may move but it depends on the area, price differential from unit to house and then the needs of the family. Also I don't think there will be an oversupply of units for the entire Brisbane, only certain areas.

 

yeah, this is right- not all apartments will be hit- mostly the stock standard ones in oversupplied areas - eg cbd, newstead/valley, south Brisbane/west end, Chermside....and those with higher BC fees.

 

Agree with the areas you've outlined @JDP1. I think the units that will do better growth-wise will be the ones in smaller blocks, way from the oversupply scenes, low strata with perhaps some room to add value in the future.

 

further, ill add that the trend is a shift towards more inner city unit living. This trend is a long term one and has been well documented in various publications.
It will be gradual over the next 20+ years.
Its more evident in Sydney than in Melbourne or Brisbane. This is partly due to various factors such as land supply, buy-in prices, and culture/preferences.

 

Yields in Perth are better, but I think you'll find that Perth and Brisbane have recently swapped places in the population growth rates on the back of a sharp slowdown in migration to Perth and WA (it's now negative for interstate migration). Brisbane's population growth is also down, but not as sharply.

 

Perth. It's not that I prefer it outright. Brisbane will attract a lot of money in the next 6-12 months as the APRA changes put the brakes on Sydney, giving it a real bump, but there's just massive amounts of supply coming online. I think Perth's will stay flat for a couple more years but it's 10-15 year prospects are really good because of the significant population growth projections.

http://www.abs.gov.au/ausstats/[email protected]/Lookup/3222.0main+features112012 (base) to 2101

http://www.watoday.com.au/wa-news/p...ird-largest-city-by-2029-20150709-gi8uwv.html

http://wapropertynews.ventura-id.co...each-3-million-next-10-years-projection/-2453

Ultimately, wherever you invest, I am simply suggesting that we should all assume far more limited growth than we have been used to, and to study and factor in the cash flow and debt reduction side of portfolio management just as fastidiously as you would previously have studied growth drivers.

The post APRA world will make that the new game , like it or not. It already has, if people are being honest with themselves. The key is simple - the whole market is effectively paying 7% - 7.5% now, as far as bank calculators are concerned - and no matter what rates actually do, no matter how low they go, the banks aren't going to drop those assessment rates any lower for a good while ( if ever) - and markets dont grow fast at 7-7.5% rates. We all know that. They didnt the last time rates were 7% +, and that was when debts were much lower and we had access to higher LVR's and more open policies including "actuals" . All of that is gone now.

Now is the decade to be deleveraging .

 

Perth's interstate net migration is now negative and overseas migration has dropped sharply.

 

never met as useless group as HTW for property cycle reports,

they get it totally wrong on so many occassions,

and according to their reports, an area goes from bottom of the cycle to the top of the cyle in 4 weeks

 

Thanks for the references Euro.

Although we may/will invest for 15 year period, I am not 100% convinced of forecasts that far ahead.

Instead I'll try and get the boom close to the start of my investment.

With lower birth rates, reduced European immigration and higher immigration from Asia, I see the Asian migrants preferring eastern states.

I do want to diversify to Perth at some stage, but I'm waiting for the bad news to start disappearing