QLD Morningside

Discussion in 'Property Analysis' started by Clayton, 6th Sep, 2017.

Join Australia's most dynamic and respected property investment community
  1. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    I know this is a crystal ball question, but maybe one for those who know the area well if we believe Morningside (South East Brisbane Townhouse) is a quality capital growth suburb to hold onto for the coming 5-10yrs? I know property is a long game & I’m good with being patient, note that value hasn’t moved in the 2 years since buying, when you add in purchase costs, including buyer’s agent fee I'm behind the 8 ball. Currently I’m out 7+k yearly in cash flow, the 5k depreciation schedule helps bring this back a little, but new 2k land tax holding costs are becoming more concerning. Wife is saying sell but I’m swaying towards locking in interest rates to reduce holding costs, any feedback will help, super appreciated!
     
  2. KayTea

    KayTea Well-Known Member

    Joined:
    10th Aug, 2015
    Posts:
    1,064
    Location:
    Inside my head
    Great suburb, but a lot of unit/apartment development currently going on in that area, and into Cannon Hill. However, I think a townhouse is likely to fair a bit better (a great 'in between' for renters who want more space than a unit, but not the upkeep of a house).

    Morningside has some really lovely pockets (there are some sections I'd be very happy to have a PPoR in), and is close to both major roads and the train line. Plus, some of the retail areas seem to have improved over recent years.

    Check the rental demand in the ares - if you're happy with that, and can afford to hold it, I'd be keeping it.
     
    db9 likes this.
  3. db9

    db9 Well-Known Member

    Joined:
    25th Jun, 2016
    Posts:
    104
    Location:
    SEQ
    Morningside is likely to do well over the next few years. Have you been up to Brisbane for a visit? Surrounded by good quality suburbs (most of which are generally more expensive than morningside) as well as being moderate to high socio-economic but still has good scope for further gentrification and already has a relatively good vibe. Plus, close to and good city and airport access.

    So suburb I like... up to you to decide though if the property itself is ok and the cashflow fits in with your overall plan and lifestyle.
     
  4. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    Cheers @KayTea & @db9 for your positive outlook going forward. Buyers agent noted similar expecting it to perform well, just had expected to see some movement in the last 2 years. In hindsight I would have bought further out with land & no strata, but optimistic that holding these next few years will be the wise move. I can bare holding costs so long as there is good potential for capital growth. Just had a look at vacancy rates, I could be off but looks like the area is sitting above the 6% which isn't ideal for rental increasing any time soon. Thanks again guys
     
  5. Heinz57

    Heinz57 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,020
    Location:
    Desert Island
    Lot of big employers in the area, particularly warehousing and logistics due to proximity to airport, port of Brisbane and gateway motorway.

    So good pool of employed renters.
     
    Clayton likes this.
  6. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,523
    Location:
    Investard county
    It's probably the best named suburb in the whole of Australia. Morningside, what a name.
     
    Kevvy7 and Tom Rivera like this.
  7. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    I'd say it may sound better than "Eggs & Bacon Bay" in Tassie haha, but I'd take that name any day if the Capital Growth is solid
     
  8. Tom Rivera

    Tom Rivera Property Manager Business Member

    Joined:
    1st Jul, 2015
    Posts:
    1,449
    Location:
    South East Queensland
    Morningside is a fringe city area, units and townhouses are suffering from a high vacancy rate and compressing prices. It's a great suburb and I'm assuming you have a larger townhouse, which is protecting you a little.

    If you can stomach the holding costs, I'd lock in and weather the storm.
     
    Sheldrick likes this.
  9. Sheldrick

    Sheldrick Well-Known Member

    Joined:
    22nd Feb, 2017
    Posts:
    112
    Location:
    Brisbane
    It's showing 3.5% on this website: SQM Research - Residential Vacancy Rates
     
  10. Sheldrick

    Sheldrick Well-Known Member

    Joined:
    22nd Feb, 2017
    Posts:
    112
    Location:
    Brisbane
    What sections of Morningside would you be happy having a PPOR in?
     
  11. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    Cheers Tom, only a 2 bedder townhouse so not overly big but haven't had any issues with vacancy as of yet. Holding costs are 6k before depreciation, deciding I think the wise move is fixing in for 3 years, reducing loan repayments & re-assessing the location in future. Should have trusted my gut instinct to buy a house, would have been further out but better investment potential & lower holding costs
     
    Tom Rivera likes this.
  12. martini

    martini Member

    Joined:
    25th Jun, 2015
    Posts:
    21
    Location:
    Australia
    Morningside is divided by the train track. The side closest to Bulimba/Hawthorne traditionally is higher priced (more Queenslanders and gentrification, bigger blocks). The side closest to Seven Hills reserve is also lovely though - great access to roads and a quiet spot. Windemere and Blackwood are lovely on that side - some million plus homes (some with city views) spreading further up Pockley and Hilldale too. A very impressive home recently built on Greendale. The back of Fleetway has lovely views including city and bushland - but with slope to the land and slightly newer houses gentrification hasn’t started much yet.

    Areas closer to the train also nice - big hill and some views.

    As an aside, the satellite photos show a lot - you can really see the areas that are being gentrified - eg Bonar St recently.
     
  13. ORAC

    ORAC Well-Known Member

    Joined:
    1st Mar, 2016
    Posts:
    141
    Location:
    Brisbane
    I lived in Norman Park for many years and so know the area well. The nearby and surrounding suburbs of Hawthorne, Norman Park, Bulimba, Balmoral and Seven Hills / Camp Hill are premium suburbs. Morningside has always been a step lower than those suburbs but a step above Cannon Hill. As @martini commented, if the townhouse is on the Western / Northern side (Hawthorne / Balmoral side) that would be best, on the Eastern / Southern side (not so bad if close to the station but the other side is better). If it is closer to the Cannon Hill side, OK but not as good as the others.

    There is a lot of development happening in Morningside as well as continued gentrification, you will need to be in it for the long haul. Apart from the usual factors, what drives prices in a place like this, is really the underlying land value and increases in construction costs over the years. In say 10 years to build a new 2 bedroom townhouse is going to be a lot more expensive (because it is the land that would be more expensive to obtain and the build costs will be more).

    Note I had a small 3 bedroom / 1.5 bathroom townhouse in Norman Park bought early 00s for low $200K and was able to sell it just over 10 years later for $500K, so things do move, they trickle along unlike the big booms that we've had in Sydney / Melbourne.

    Note that Morningside has Brisbane's highest awarded cake shop - Flour and Chocolate Patisserie, an emerging cafe precinct, the Colmslie hotel, Coles and Woolworths supermarkets, Goodlife health club with a pool (one of two Goodlife's in Brisbane with a pool!), some other restaurants (esp. Indian), Medical practices, other professional services, and Westpac / ANZ bank branches. Apart from good proximity to the CBD, and also to places like Oxford St, Bulimba, there is an emerging light industrial / warehouses / distribution type centres not so far away heading towards the Gateway bridge - so this makes the likes of Morningside / Cannon Hill somewhat unique for diversified employment opportunities (i.e. not totally reliant on those working in the CBD).

    So perhaps on a spreadsheet, do some calculations of say the price doubling within 10 to 15 years, some modest rent increases, interest rates and see how it stacks up. The long term future of Morningside would be good but does need patience.
     
    namrata and martini like this.
  14. martini

    martini Member

    Joined:
    25th Jun, 2015
    Posts:
    21
    Location:
    Australia
    I’d add that Camp Hill wasn’t traditionally an expensive suburb, but has done exceptionally well over the last 15 (?) years and now seems more expensive than Morningside (particularly led by the avenues).

    Cannon Hill traditionally was more working class than Morningside, but since 2011 I’ve noticed far more progress in Cannon Hill - eg Marsh St - around the Wynnum Road corridor and closer to the train station - I assume also some zoning changes in the last city plan. Some streets on the south side of Wynnum Rd in Cannon Hill have great city views.

    And then there’s Murarrie and Carina, IMO, ones to watch.
     
    namrata and Tom Rivera like this.
  15. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    Revisiting my old post, Morningside a year on still flatlining on price looking at comparable 2bed townhouses, still weighing up the viability holding. Looking at the latest SQM vacancies it does however look like its come done to 2.8%, is this a sign of the oversupply beginning to filter out?
     
  16. Codie

    Codie Well-Known Member

    Joined:
    6th Mar, 2018
    Posts:
    523
    Location:
    Brisbane
    I looked at many 3bd Townhouses on the bulimba/Hawthorn side of the train track, all around the $500k mark, did not end up going for it and bought a house northside, now revisiting the thought of it for a PPOR and looking at it 12 months later prices have actually come down, the same townhouses still for sale or under $500k.
     
  17. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    Not the upside I was hoping for but expected in the current market of over supplied units I guess.. In hindsight I should have gone with my gut feel on research to go for a house with land further out.. Buyers agent didn't like that idea & stuck within 5km of the city.. Wonder how redcliffe & surrounds has performed over the 3yr period . Too scared to look
     
  18. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    Just thought I'd throw in a quick msg, had my first walk through of the townhouse as it was bought sight unseen. Yes as mentioned from others Morningside felt like a nice area, well positioned with the train station & shops. However had I flown back & inspected I would NOT have purchased it. Immediately on walking in it was tiny & much more dated than I had expected, kitchen & bathrooms are in major need up upgrading plus a list that goes on. Quite disappointed with the purchase, I have 12 months of fixed rates to go & will assess the market in 2020. Likely will proceed with cutting my losses & offload for a better non body corporate investment. Challenging as I was working overseas, but Good lesson to be learnt not to buy sight unseen in the future even if using a buyers agent, cheers
     
  19. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    2,181
    Location:
    Australia
    Apart from the prestige areas like New Farm, Teneriffe (and even then), Brisbane is IMHO a house and land suburb as far as IP's go. Don't bother with units and townhouses.
     
    Clayton likes this.
  20. Clayton

    Clayton Well-Known Member

    Joined:
    21st Nov, 2016
    Posts:
    99
    Location:
    Melbourne
    It had sold for 260k in 2006 & I bought it for 380k in 2015 so clearly at some point values do rise. All the talk at the time was Brisbane following in Sydney's price rises which is why I got in, but yeah the oversupply of inner city units & the economy slowing the timing wasn't right. Not being a local to Brisbane I agree with you & left with that same thought, a house on land would have been a wiser investment.