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QLD Inner Brisbane Market 'Overcooked'

Discussion in 'Where to Buy' started by Leo2413, 29th Mar, 2016.

  1. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Interesting research, especially for inner Brisbane unit markets, though won't be a surprise to many.

    @Simon Hampel if this article is not allowed to be posted please let me know and ill delete it.
     
  2. teetotal

    teetotal Well-Known Member

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    Nothing new, typical generalisations of a segment of major cities.
    Rather it'd be interesting to see these trends by suburbs/streets but no "property insighters" will do that because that will give everything away.
    These so-called insights are mostly created to change the market psychology about an area. Then fuel it further by self-filling prophecy.
    Similar thing started happening in sydney 6months ago regarding auction clearance rates and it turned true by self-filling prophecies.
    These "insighters" try to change our mindset all the time and they get success almost every time. :confused:
     
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  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I agree that there is some generalisation in the article but overall I think it is highlighting the new unit markets in the inner CBD. I think at the very least the article could serve as an eye opener for newbies who want to purchase an OTP unit in the cbd to asses the below factors that were outlined in the article and then decide:

    1.Sales volumes are declining
    2.Increasing stock for sale
    3.Properties are taking longer to sell
    4.Vacancy rate increasing
    5.New housing supply outpacing demand
    6.Rents are falling
    7.Prices have plateaued

    I think the above are some good measures to analyse the market and then make an informed decision.
     
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  4. See Change

    See Change Timing Lord Premium Member

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    Michael has been quite negative about Brisbane for a while . I saw that article and thought it was really written to catch everybody's attention ( like it was coming from a property investing guru ........:rolleyes: ) rather than inform people which I thought was disappointing

    I'm paying more attention to the HWT reports now days . I find they're insightful and quite balanced in their approach.

    Yep there is an oversupply ( according to all the experts ) but again ( according to all the experts ) it's more in the CBD and a couple of suburbs where there are large blocks of generic " investment grade " units .

    Cliff
     
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  5. Leo2413

    Leo2413 Well-Known Member Premium Member

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    That's a new one :p

    I do get the sense he's emphasising unit markets in the cbd with oversupply but maybe that's my subconscious thoughts coming through when I read the article..
     
    Last edited: 29th Mar, 2016
  6. See Change

    See Change Timing Lord Premium Member

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    Picky ... Ok , typo HTW :rolleyes:

    Cliff
     
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  7. MTR

    MTR Well-Known Member Premium Member

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    I thought Michael had a vested interest in talking it up??? whats going on
     
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  8. JDP1

    JDP1 Well-Known Member

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    overcooked - apartments in CBD;s of bris, mel, sydney - yes in the short term
    In the longer term- no.
     
  9. Leo2413

    Leo2413 Well-Known Member Premium Member

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    But nothing in the longer term is oversupplied right? Assuming someone is going to extract equity from an IP to reinvest in the next and next etc, isn't the ....well at least medium term outlook important for that process...otherwise if all property is bought with the view of CG mostly to be realised in the longer term then how is a portfolio built in the mean time...

    Unless they have a portfolio with much equity already and just looking to add another ip for long term. Ok just answered my own question.. :D
     
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  10. See Change

    See Change Timing Lord Premium Member

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    Moranbah ??

    Cliff
     
  11. willair

    willair Well-Known Member Premium Member

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    A lot of people don't understand how Brisbane works,any of the developments near west end
    new farm all sell out,where around Buranda with all the multi unit developments near finished
    and those still in the carpark stage are all sold out,as a low level multi developer told me on the weekend,we only stop building when they stop selling..and that's not happening..
     
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  12. Kate Moloney

    Kate Moloney Well-Known Member

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    As the saying goes, when there are lots of cranes in the sky .......
     
  13. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I was referring to 'normal supply and demand markets'. When I made that comment in the back of my mind i just knew someone would mention a mining town.. but mining towns are in a world of their own that's why i didn't bother to further clarify.
    OK, 'almost nothing', ....who is being picky now. :rolleyes:
     
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  14. JDP1

    JDP1 Well-Known Member

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    Yep thats right. They are sellinh and not just in brisbane. Similar trend in mel and sydney.
    In the short term cg will be limited with all the supply.cg will grqdually improve as the desirable land in the cbds gets taken up by these apartments. A gradual and lomger term process. There is also a densification of demand of cbds happeninh whicg will add to the demand and get stronger with time. Look at all the major cities of this world- id say the majority of people would prefer flashy inmer city apartments vs proper house way out .
    Not to trash houses way out, there will aleays be a market for those...but not as much as inner city apartments.
     
  15. Redwood

    Redwood Well-Known Member

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    Agree - they are selling but are heavily remunerated. Many are sold at high comms to unknowing interstate investors blinded by yield and rental guarantee. Come valuation time the bank may provide the true story, which will be hidden from the end customer by the 'onestopshop' selling the rubbish.

    Same as Melbourne, they are getting built as they are buying the land under a term contract with most apartments sold before settlement. Brisbane is hot, lets hope the population continues to grow as well as the infrastructure.....lots of cranes in the sky.

    Cheers Ivan
     
  16. Jacob1

    Jacob1 Member

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    Segmented markets much like Melbourne; you go to Docklands and South Melbourne and the vacancy rate periodically spikes to 12%. You go 3 kms down the road the Richmond where you're at 1.3%.

    What's not in the newspapers is that whilst there are a lot of approved projects a large portion of them won't get out of the ground. Build costs have gone up circa 30% and the margin on a lot of projects won't be enough to make the risk feasible.

    I wouldn't touch Fortitude Valley, Newstead Newfarm etc.. I am however a fan of West End despite the future supply in the area. A combination of the affordability, proximity to amenity, Queens Wharf redevelopment, Kurilpa Riverfront Urban Renewal..
     
  17. Azazel

    Azazel Well-Known Member

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    Maybe in the areas where he has some actual interest, sprui... er advertising for units further out?
     
  18. Tenex

    Tenex Well-Known Member

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    I have said this before, purely based on employment and other factors that increase demand in an area, with the mining sector where it is at present, Brisbane as a whole will be where Perth is right now in near future. If I had the money to invest right now I would buy in Perth before buying in Brisbane.
     
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  19. JDP1

    JDP1 Well-Known Member

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    lol @Tenex
    You are ( perhaps the only but certainly the most) bearish commentator on Brisbane on this forum.
    Your above view would have held good 4-5 years back...certainly not anymore. Quite the opposite, most of the jobs and growth have nothing to do with mining. Look at whats in the pipeline- nothing to do with mining; driven by very different industries like education, tourism, retail, construction, hospitality, etc ..so cant see how it can fall back and be a perth.
     
  20. teetotal

    teetotal Well-Known Member

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    I agree with your point however this post has got me thinking now.
    I think with Perth most people would have said "i cant see how it can fall back".
    The sectors you mentioned @JDP1 - education, tourism, retail, construction, hospitality etc. Are we able to think of any scenarios where they might fall back ??
    And as such, we as investors need to be prepared for these uncertainties and be able to react accordingly.
    Thoughts ??