Join Australia's most dynamic and respected property investment community

QLD Owner Occupied Unit Purchase Off The Plan

Discussion in 'Where to Buy' started by 1st_Home_Buyer, 6th Dec, 2015.

  1. 1st_Home_Buyer

    1st_Home_Buyer Member

    Joined:
    6th Dec, 2015
    Posts:
    6
    Location:
    Australia
    Hi all,

    First time to the forums and first time home buyer.

    We have been looking for a property for probably 3-4 months at the moment. We have a budget of $650,000 and have not made our mind up on whether we want a house or unit.

    I know that there are plenty of cranes in the Brisbane skyline at the moment building plenty of units. I want to know whether I should talk myself out of possibly buying a new unit off the plan to live in for the next 5-7 years?

    My partner and I both work in the city. We love the access to the river and having shops and restaurants close by.

    I am really worried about resale value when its time to upgrade. The property we are looking at in particular is currently under construction and we could pickup a 'luxury' 2 bedroom, 2 bathroom, 1 car apartment of 105m2 for $589 - 621,000 before the $15,000 grant. Its in a two tower complex with 187 units in Newstead. Its called La Vida.

    We have also looked at houses. We want to keep relatively close to the city to avoid travel time and costs to work. Most of the places we have looked at around the $600,000+ price range within 10km of the city and close to Public Transport that are move in ready aren't that big. Most around the 100-120m2 mark interior wise.

    Looking for some tips from the experts. What would people do in my situation. Should i be worried about the resale? Would this be a great opportunity to have an investment property in 5-7 years times when we are looking at possibly moving into a house in the suburbs??

    Cheers
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,458
    Location:
    Sydney & Gold Coast
    In my humble, evidence-based opinion, the odds of the value of a CBD apartment going backwards or doing nothing at all for the next few years are higher than they are of it going up. There is an almost unlimited number of them being built and not an unlimited number of people wanting to buy/live in them.

    The reverse is true for houses.

    If 105sqm (hopefully not including the parking) is ok for an apartment, why would a larger house be a problem? $650,000 will get a lovely home 10km out from the CBD.
     
    DiligentPM likes this.
  3. seanbrissy

    seanbrissy Well-Known Member

    Joined:
    2nd Nov, 2015
    Posts:
    77
    Location:
    Brisbane
    DiligentPM likes this.
  4. 1st_Home_Buyer

    1st_Home_Buyer Member

    Joined:
    6th Dec, 2015
    Posts:
    6
    Location:
    Australia
    If units are a no go then why are they being snapped up so quickly? Who is buying them and for what reason??
     
    Tekoz likes this.
  5. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    The kedron one was good
     
  6. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    Chinese. Koreans. Visa/immi rules
     
    Tekoz likes this.
  7. CosmicTrevor

    CosmicTrevor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    117
    Location:
    Sydney
    La Vida is pretty much on the corner of Ann St and Commercial Rd - pretty busy I would think. While this might not bother you it might affect a future buyer.

    I've checked the floor plans and the 105m2 units are on the S/W corner from level 3 to 11. The corner is a good option, even better if at least 1 bedroom doesn't have a common wall with another unit. Having said this be careful as Broadway on Ann is going up right next door and Alex Perry (already built) may block the view as might future developments in that area. I think you should assume any view will be lost, even on level 11.

    This would rule it out for me.
     
    Whitecat likes this.
  8. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,620
    Location:
    Sydney
    You said yourself that cranes are everywhere in the CBD. This means that there are plenty that are still to go on the market. There is an oversupply issue with units. Maybe visible now, but definately going to be clear as day soon as they come to market. You have been given good advice above. If you want to live relatively close to City with a decent amount of room and minimise your risk, for your budget buy within 10km a property with land. You'll get a bigger place, a parking spot or 2, backyard and a much better chance of your property being in greater demand because of the land component especially now as Brisbane goes through this growth phase.
     
  9. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    10kms from bne isn't very exciting. Not disagreeing with your investment advice at all. You are right. From a figures pov he should buy a house on a decent block. But 10kms from the cbd in bne is like 50kms in Sydney. From a social pov. Maybe OP should buy a house in Chermside and rent in the cbd.
     
  10. big max

    big max Well-Known Member

    Joined:
    30th Nov, 2015
    Posts:
    1,014
    Location:
    Gold Coast
    If you will live in it, than takes a big risk out of the equation. Guaranteed tenant, no agency costs and you look after the place. I would by a nice 2 bedder. In my view much more upside than any downside risk next 5 years.
     
  11. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    I'm interested in why you think this about a2 bed unit in the bne cbd. There is a heck of a lot of stock.
     
  12. CosmicTrevor

    CosmicTrevor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    117
    Location:
    Sydney
    One other thing - and I don't care what any structural engineer, REA or project marketer tells me - having a pool on the roof scares the hell out of me. If there are problems I can see the body corporate up for lots of $.

    I remember seeing a render for a development in Newstead nearby that has a roof top pool. It looks so classy and "stunning" (god I'm sick of that word). Then I had a closer look - I reckon it was about 12m long and about 3 lanes wide. Seriously is that even worth having in a building with >200 apartments?

    As an owner occupier you would be fighting with short and long term tenants who don't give a rats rear end about the pool or the other common facilities.

    Personally I'd look at smaller developments in the area and if you must have a pool go with one in the ground and in a development by well regarded developers - like Cavcorp and Mirvac. I'm not disrespecting the developer of La Vida by the way, you should do your own due diligence on them.
     
    Tekoz likes this.
  13. big max

    big max Well-Known Member

    Joined:
    30th Nov, 2015
    Posts:
    1,014
    Location:
    Gold Coast
    I think we will see all stock that comes on well absorbed. We have Asian buyers about to start hitting Brisbane and Gold Coast big time. We have Sydney and Melb investors eying Brisbane on value. We have interstate retirees selling up and moving to Brisbane. We have generation x and y wanting to move into the city and away form parents. We have continued growth in students from Asia. We have unemployment levels in Brisbane falling. And we have very strong growth in terms of Gold Coast tourism which will benefit Brisbane. To me it all looks really positive.
     
    Tekoz likes this.
  14. seanbrissy

    seanbrissy Well-Known Member

    Joined:
    2nd Nov, 2015
    Posts:
    77
    Location:
    Brisbane
    "I am really worried about resale value when its time to upgrade."

    Median price for Newstead units is $715,000
    12 Month growth -7.14%

    "Should i be worried about the resale? Would this be a great opportunity to have an investment property in 5-7 years times when we are looking at possibly moving into a house in the suburbs??"

    Generally speaking in Brisbane during an upward cycle capital growth works like this:

    Phase 1: Houses Inner city suburbs
    Phase 2: Houses Middle ring suburbs
    Phase 3: Houses Outer ring suburbs
    Phase 4: Established townhouses and units

    On the downward cycle negative growth starts at phase 4 and works backwards.

    OTP is different again as it's influenced by outside factors

    This is a general guide as there are so many other variables to consider with units, more importantly there must be a disparity between the price of a unit and house before the take up begins.
    This is not to say a unit will never achieve capital growth because that's simply not true., think of it more like this - the window of opportunity to achieve CG is significantly less in each cycle.

    Cheers
     
  15. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    I think OP has been given good advice but i guess really wants to live in ppor in the cbd.

    I believe we are seeing that cycle you dot point. Middle ring is going good in bne. Wavell Heights is selling very very quickly it seems and I'm happy about that (finally). What I'm not so sure about is why townhouses are in with units in your list. Wouldn't some people go to a townhouse if priced out of inner ring rather than going to outer ring. Location is a big factor. In a lot of ways a townhouse is more similar to a house than it is a unit. I've been hearing mixed views about whether townhouses will be affected by unit oversupply that's why I ask
     
  16. Whitecat

    Whitecat Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,082
    Location:
    Brisbane
    How do you know this Max?
     
  17. big max

    big max Well-Known Member

    Joined:
    30th Nov, 2015
    Posts:
    1,014
    Location:
    Gold Coast
    I'm based in Asia. I know the mentality and vibe and I can see the marketing ramping up for 2016 already. The same machine that created the boom selling apartments to overseas buyers in Sydney and Melb has now moved on and will ramp up to sell Bris and Gold Coast 2016-2020.
     
    Tekoz likes this.
  18. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,894
    Location:
    Sydney
    House with land closer into the city, flood free would be the go.... they can keep building more and more units but the supply of houses near the city will always be limited....
    Even if there is demand for units, they can always created more supply easily to cater for the demand. Not so true for houses unless the land sizes become smaller --> subdivide --> win if you already own or more infill houses or more greenfield sites (you are inner city? Win!)

    Whereever demand will tend to exceed supply is what you want, and that is harder to guarantee with a CDB unit purchase. You can't bank on no more supply to happen, that's completely out of your control. And its hard to make your property stand out from all the others... except on price.

    This was a good share by Seanbrissy:
    I agree with it. However, I think the townhouse stock tend to move in line with the surrounding houses though, but the movement upwards and downwards can be more muted and contained. Just like duplexes. But generally townhouses/duplexes are a solid performer along with the suburb at large. I own a townhouse, 2 units and 2 houses and while there is no chance of subdividing the land a townhouse sits on, it just quietly acquiring capital growth along with the rest of the suburb. Its a cheaper entry point for families in the area, but townhouses are a family friendly property though.

    Mine has a pool and a games room, parks nearby. That property has long term and really lovely tenants with 2 kids, one who is about to start school next year and I have been able to regularly raise rents. Its not easy to build huge new townhouse developments in an area unless the developer gets a lot of land to work with. So either townhouse developments must be located when/where the area is considered new (very outer ring), or smaller boutique style closer in. While supply can increase, it wont be like units where they can go and build and release 100 properties or more in one go. Townhouses/duplexes will be better than units from the demand-supply perspective. Attractive buy in prices to a suburb, family friendly... lower maintainence than houses... (dont need to spend hours maintaining a huge garden)... townhouses and duplexes have a lot going for them.
     
    Last edited: 8th Dec, 2015
    Whitecat likes this.
  19. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    939
    Location:
    Sydney
    I recently rented out a townhouse to a young family but in my complex it only has 4 townhouses in the complex. No lifts, no pool, no games room and etc. Exactly the way I like it lol.
     
    Whitecat likes this.
  20. DiligentPM

    DiligentPM Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    443
    Location:
    Brisbane
    Good advice Also at the very least you want two carparks for a two bedder in that price range if you don't want to lose value