NSW Northern NSW (Tweed Heads/Banora Point) purchase notes

Discussion in 'Where to Buy' started by Blueskies, 24th May, 2021.

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  1. Blueskies

    Blueskies Well-Known Member

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    Hi PC crew. I recently bought an IP in Tweed Heads South and thought it might be worth sharing details of the research I did on this region that led to this purchase. May be of use to anyone else looking around this area. I will start at a region level and work down to the individual property selection.

    Region - Northern NSW

    I started looking here for several reasons. First was I wanted something interstate so I could make use of a new land tax threshold. I looked all around the country but ended up choosing this area as:

    * I think the trend to lifestyle regional areas close commute to capitals will continue, particularly coastal.
    * There is already steady growth, low vacancies, and high interest in the region.
    * I could drive down from Brisbane on weekends for open homes and ongoing inspections/maintenance etc.
    * Potential to convert to PPOR in retirement

    Tweed Heads, Tweed Heads South/West, Banora Point suburb selection

    I narrowed down to these suburbs for the following reasons:

    Affordable: In Northern NSW, Ballina, Yamba, Kingscliff, Casuarina are all very expensive, basically nothing under $1M. Forget about Byron Bay. Over the border at Coolangatta same story and the prices just increase as you move up the Gold Coast. The median for houses around Tweed Heads suburbs is around the $700K mark. See Heat map image

    Infrastructure: A lot of the smaller coastal towns in Norther NSW have very little local economy other than tourists/dining/light retail. Tweed Heads is a major centre with a Hospital, 2 malls, several schools, a light industrial area and the airport. This supports an ongoing pool of long term tenants.

    Demographic: How do I put this delicately – Tweed Heads is like god’s waiting room. There is a lot of retirement living and seniors everywhere. We aren’t talking cashed up boomers either, a lot are even older. As a result I would say the place feels a bit tired. I see this as a positive as I can see the potential for this to shift over time. A lot of the opens I went to the vendors were elderly people downsizing, however the vast majority of prospective buyers were young couples/families. Tweed Council have identified rejuvenating the city centre as a key priority in their city plan. My hope is the area will become more vibrant over time as this demographic changes, leading to good price gains.

    Investment metrics: Prices have been steadily growing, stock on market falling, rental yields are at >5% for houses and the vacancy rates are under 0.3%! It would not be exaggerating to say there is a full-blown rental crisis in the area, hence rents are rising strongly. The sales market is like lots of other areas at the moment – crazy! Long lines at every open and everything under offer after first weekend.

    heat map.jpg .
     
  2. Blueskies

    Blueskies Well-Known Member

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    Individual Property Selection

    I like to eliminate areas first before getting down to suburb/street level. The following were off the list:

    Apartments – there are lots around, the growth hasn’t been great and my preference is to only buy free standing houses. There are a lot of duplex’s around these suburbs that are a bit cheaper if you want a bit better yield.

    Flight path – Check the flight path out of Coolangatta airport. The flights travel straight out south and then turn left over the ocean. I avoided places directly under the flight path. See snip.

    Flooding - As these suburbs are around the mouth of the tweed river a lot of the area is zoned flood risk. Also being coastal there is climate change/peak tidal zones to be aware of. Interactive mapping is available. See snip below

    Suburb breakdown:

    Tweed Heads: Most expensive but also most desirable as closest to beach/amenities. Also possible to find properties zoned for medium and high density.

    Tweed Heads South: Suburb on the southern side of the river. Mall, Shops, Schools, Light industrial area. Some new small developments. Certain parts are high flood risk and directly under flight path.

    Tweed Heads West: My impressions were that this area was a tad rougher. A little bit further from the beach, but still some nice homes in elevated positions. Some homes were on extremely steep blocks which I avoided. Also there is a section that is really close to the airport/flight path.

    Banora Point: Generally nice suburban area with larger, newer (still 20 year old) homes. Again, some sections under the flight path and some impacted by freeway noise.

    Final selection

    * Large free standing home in Tweed Heads South.
    * Elevated (flood free) position with views.
    * Dual occ potential.
    * Price: Mid 7s, Rental yield: 5.2%
    * Long term plan: Buy and hold, potential demolish and rebuild as PPOR in 20+ years.

    Any questions/critique of strategy please feel free to fire away.

    vacancy rate.jpg
    rents.jpg
    floods.jpg
    more flightpath.jpg
     
  3. TAJ

    TAJ Well-Known Member

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    I think your in-depth analysis of the region will pay handsome dividends now and well into the future!
    Well done Blueskies!;)
     
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  4. EK01

    EK01 Well-Known Member

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    Our eldest son and his Wife just bought in Banora Point for largely the same reasons pointed out above by @Blueskies. We have recently bought and are now renovating our (future) retirement home in Kingscliff. Its a great area and the secret about the value to be found in TH, BP and surrounding areas is now well and truly out!
     
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  5. ashish1137

    ashish1137 Well-Known Member

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    Congratulations @Blueskies

    An indepth analysis. All the best.


    Ashish
     
  6. ip2222

    ip2222 New Member

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    Thank you for posting this. Can I ask how you extracted the flight path information?
     
  7. skater

    skater Well-Known Member

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    We looked at some lovely areas around Tweed, before we bought in Burleigh Waters.
     
  8. Blueskies

    Blueskies Well-Known Member

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    I can’t remember the exact source, but it was as simple as googling Coolangatta airport flight paths and skimming the material in the search results that came up.
     
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  9. Never giveup

    Never giveup Well-Known Member

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    Mate, great stuff

    Please update us how is the journey going?
     
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  10. Blueskies

    Blueskies Well-Known Member

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    All good from my end. 45% price gains in the last 12 months not to be sneezed at! I suspect the pace of growth may be starting to slow down a bit, although I am not "on the ground" looking at houses so not sure what the vibe is.

    Vacancy rates just get more and more insane though, there have been several articles In the media about this, same for a lot of coastal areas. 0.1% at the moment, might as well be zero.

    Only downside has been the latest announcement by the Queensland government that they will be including interstate properties in their land tax thresholds. Given the time I spent researching areas, and months driving down over the border early each Saturday morning to go to open homes, it is very frustrating to have some QLD ALP bureaucrat wave a pencil to say they want their cut!

    Screenshot_2021-12-27-09-12-23-12.jpg Screenshot_2021-12-27-09-15-56-48.jpg
     
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  11. boganfromlogan

    boganfromlogan Well-Known Member

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    You need to get the border moved further South. Or you will lose at least an hour a day due to daylight saving.

    When u move in , 20 years time
     
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  12. Stoffo

    Stoffo Well-Known Member

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    I've got to say this is the most frustrating thing to get used to :mad:
    Living so close to the border your phone can never decide if it want's to be on Qld time or NSW time :confused:
    Things like your alarm going off an hour earlier than planed, or being an hour late/early for a Uni lecture (because the lecturer based in NSW states NSW time not Qld time where the Uni is) :rolleyes:
    Am glad it's over for now o_O
     
  13. skater

    skater Well-Known Member

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    Sydney? Gold Coast?
    That's the one thing I'm not looking forward to.
     

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