Should we give up on Brisbane?

Discussion in 'Property Market Economics' started by standtall, 21st Sep, 2019.

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  1. standtall

    standtall Well-Known Member

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    Yes yields are there and there has been some growth in inner ring but most would agree that Brisbane has failed investors’ expectation year after years and while Sydney and Melbourne markets are buzzing with activity after rate cuts and regulatory u-turn, Brisbane has generally not responded yet again - not even spring time surge.

    Is it time we accept Brisbane is another Perth in the making and capital growth isn’t coming any soon?
     
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    When Brisvegas is no longer a country town, then it will follow the pattern of Sydney and Melbourne, it's another boomtown, it just happens to be the capital of Qld. It lacks the seriousness of the other two capitals with few top tier companies headquartered there.
     
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  3. Sackie

    Sackie Well-Known Member Premium Member

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    I'm happy with my returns over the last 5 years. All inner to inner-middle ring. Larger lots with older homes. Bought at good prices. I can't complain. No boom but decent returns, especially the development sites.

    Brisbane is definitely not another Perth.
     
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  4. Danieljk101

    Danieljk101 Well-Known Member

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    Agreed, I had enough, I’m attempting to sell my Chermside west property at the moment.

    Will be lucky to get 5% above what I paid in 2014...
     
  5. Leeroy93

    Leeroy93 Well-Known Member

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    Affordability to the other major capitals has historically and will play its part as some stage. Risks can be mitigated by focusing on certain markets with price disparity, add value opportunities to create equity and a history of consistent demand. No need for a crystal ball. I certainly don't believe Brissy represents a high risk market long term unless you're considering non-owner occupier stock or areas with enviro/flood issues.
     
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  6. standtall

    standtall Well-Known Member

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    I see your point but developing is more than investing and sure people have made money buying older houses on bigger blocks in suburbs like camp hill and turning them into fancy townhouses but that old house probably still costs same as it did 4-5 years ago.

    I know we all like to favorably value our investments but objectively speaking most investments in Brisbane (inner ring included) haven’t moved much in last 5 years. If anyone has some specific examples where market has positively (and significantly) impacted a house value without a subdivision/reno/rebuild, please share them in your reply.
     
  7. Sackie

    Sackie Well-Known Member Premium Member

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    Putting development sites aside,


    2015 bought a house in Holland Park for 522k. Today comparables are selling in the high 800s .

    Bought house in seven hills for 715k. Today The land alone is worth over 1mil. Definitely no boom results with those but not comparable to Perth by any stretch of the imagination.

    The reason I mostly chose add value deals in Brisbane is because I knew long ago if I wanted accelerated returns in Brisbane, my strategy/stock type/ locations would need to be correctly suited to the state I'm investing in. Otherwise it would have to be a long term buy and hold. Expectations need to match your strategy chosen plus where in Australia your investing.


    These are my thoughts:
    What some ppl are unhappy about is they chose a certain strategy for Brisbane and expected returns to be faster. A) the strategy chosen wasn't suited to the state for faster returns and B) if they wanted to choose buy and hold for possibly quicker returns, then Brisbane was the wrong city for this.


    Then..... you have those.... brave souls who bought in woop woop around Brisbane....I wouldn't dare to imagine when they'd see decent returns.
     
    Last edited: 22nd Sep, 2019
  8. Angel

    Angel Well-Known Member Premium Member

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    State election next year - unless the current mob get sacked sooner.
     
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  9. Sackie

    Sackie Well-Known Member Premium Member

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    The house itself might but definitely not the land. The moolah is in the land for those areas with development ability.
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Is the Brisvegas strategy buy, refurb & hold looking at a rental play? Even still, there's absentee landlord taxes, higher pm fees etc to consider.
     
  11. Willy

    Willy Well-Known Member

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    Having just bought in Brisbane this thread is reassuring.
    Wouldn't like to be buying when people are talking about how much their properties have gone up recently.


    Willy
     
  12. wombat777

    wombat777 Well-Known Member Premium Member

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    On my analysis of Core Logic 5-city data Brisbane has turned and indeed may show a neutral YoY change ( currently my forecast is -0.6% YoY based on the trend of the last 28 days ).

    Is this the start of a longer-term albeit slower growth period for Brisbane? ( green line in my charts below ).

    Screen Shot 2019-09-20 at 6.13.18 pm.png

    Screen Shot 2019-09-20 at 6.15.27 pm.png

    Screen Shot 2019-09-20 at 6.15.45 pm.png
     
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  13. Trainee

    Trainee Well-Known Member

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    Given the income difference, is buying only in syd/melb better than diversifying to other cities, even with the land tax?

    So if high and increasing prices are supported by increasing numbers of people on high incomes, will growth in bris, perth etc be lower long term?
     
  14. willair

    willair Well-Known Member Premium Member

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    My guess is it will go the same as it has for the last 35 years ,some we purchased in the late 1980's early 1990's for below 100k ,and it does not matter what's sitting on the block it's the land content are now above the mill mark ..Peter Spann was right when he talked about that simple rule all that all those years ago and if you wanted to save money drink cask wine, ..Just depends on the location outside of the BCC you may well be kicking tyres..The Public Trustee - Brisbane
     
    Last edited: 22nd Sep, 2019
  15. iloveqld

    iloveqld Well-Known Member

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    With Brisbane slowness in mind, where is currently a better state/suburb for the same range 450-750k houses with the same potential growth? Any ideas please as after looking, I still find Brisbane attractive at the current state?
    But I also want to extend my stocks to other states.
     
  16. My House QLD

    My House QLD Well-Known Member Business Member

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    Absentee taxes in QLD have gone for Australian citizens now.
     
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  17. standtall

    standtall Well-Known Member

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    A typical house in Holland Park has only gone up 10% in value since 2015 as far as median values are concerned. I am not doubting your claims but it seems like a dismal story for other Holland Park owners and investors. I am sure you could have made money anywhere else in Australia using your buying skills but Brisbane market has probably made no contribution to upside you are reporting.

    I really would have liked Brisbane to respond better to two rate cuts and recent lending ease.
     
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  18. standtall

    standtall Well-Known Member

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    The very reason those houses are priced 450-750k is that most people don’t see much growth potential in QLD unlike some of us who bit the bullet and learnt the hard way that there wasn’t much growth potential to begin with.
     
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  19. Bris developer

    Bris developer Well-Known Member

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    Let me just put it out there... Qld can’t grow that much
    - there is so much land between Toowoomba , Ipswich, Sunshine Coast, down to the GC
    - the state has the most decentralised population
    - the incomes are pretty low most people DO NOT earn anywhere’s near 6 figures in Brisbane
    - very little Asian migration or capital

    there is no FOMO / pressure cooker situation in Brisbane and never has been. We repriced once in the mid 2000s during the great global expansionary boom. Chris bates mentioned going for BLUE CHIP SCARCE FAMILY HOMES (ie. quality PPR homes) and thinks they will still grow strongly, but most other properties will be an inflation hedge at best I think.

    Bris is OK for developing as holding yields are better and entry barriers are less. But u gotta still sell the finished product to clear your debt and very hard to sell anything OTP or mediocre up here when other developers are still discounting / try to rent out things that we’re built 1-2 years ago.
     
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  20. Sackie

    Sackie Well-Known Member Premium Member

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    If you want the typical house in a Brisbane Inner or middle ring suburb to appreciate alot in a short period of time - will never happen. I understand growth has been elusive for the average stock in Brisbane. But that's Brisbane. Imho it's a good city for add value or buying BMV and long term BnH. It can't be compared to Syd or Melb. They are completely different markets ( with much higher buy in prices too) .
     
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