Basically doing my girlfriends parents a favour and seeing if anyone here is familiar with the area and perhaps the best move going forward. They purchased a 4/2/2 almost 10 yrs ago for approx. 415k on what seems like bad advice as the growth wasn't there and has suffered a 7-10% loss over the years of ownership according to suburb data. They paid IO so there loan amount is still at a high LVR and with negative growth and bills they are hurting. Think they want to sell up and cut their losses but thought id post here as to whether anyone sees a turnaround? With Brisbane heating up potentially and this being within 60 kms and within an hr to the CBD could it see a ripple effect CG wise down the track....... Cheers Ramos
Hi Ramos, That's very disappointing for your gf's parents - buying after receiving poor advice. You are correct that the long term fundamentals for Brisbane are quite strong and that over time they are likely to see return of capital growth to the area. Unfortunately though, Sandstone Point is within close proximity to areas like Caboolture, Burpengary, Nerangba, Deception Bay etc. These areas are being promoted by a lot of developers as 'up and coming areas'. On the upside, there is potential for these areas to see very good population growth over the next 10-15 years. On the downside (and what is going to restrict potential capital growth) is the significant oversupply issues. There is A LOT of vacant land being 'land banked' by developers just waiting for the right time to obtain approvals, subdivide and create more supply than is required. Your gf's parents need to think about exactly what are their objectives. If I was you, I would be making sure they don't rush to make a decision either way. If they are looking at holding the property long term (say 10-15 years) - they could certainly do worse. Remembering - if when they are talking about 'cutting their losses and selling' they are talking about then investing in property in another location, they need to remember, that simple process of selling and then buying somewhere else could easily cost them $40-50k in any remaining equity. Sales agents fees etc will cost them to sell, they will then have acquisition costs on the new property. If however, the decision is more based on cashflow and it is costing them too much money and they simply want out without purchasing elsewhere, that is obviously a completely different consideration again. I certainly wouldn't expect that they will see a 'quick' improvement, but if they are willing to hold - selling and buying somewhere else might not be their best option. Again, I would encourage them not to rush into anything and probably seek some good financial and tax advice as well as some property specific advice. Hope this helps (and doesn't confuse you more). Good luck.
Thanks for the response Bryan! I appreciate your knowledge of the area. I have only heard about Caboolture when watching the news and hearing about stabbings...!!! I think this would be a sell and not purchase anywhere else as they have a PPOR in Sydney suburbs and a IP in Hurstville. I will recommend they seek professional assistance, considering I don't have access to their finances and financial situation. I just offered to help and had them slow down any decisions to avoid a distressed sale with even more losses. NB. late reply I have been in Melbourne on a pleasure trip, MCG, Crown etc ha ha
