QLD Should we give up on Brisbane?

Exactly, you can’t buy Brisbane and you can’t buy Sydney. You buy a block of land that is sometimes improved, but you buy the location. Yet on a forum devoted to property still so many discussions not sophisticated enough to talk about markets and still so many quote generalist statistics designed for headlines. Discussions around macro and micro economics, infrastructure, policy, planning and governance are fair at a view as far as they can impact generally; but surely on a forum dedicated to property we can aim for predictions around markets and asset types.

Unless there is someone here who actually wants to buy Brisbane

 

A typical house with subdivision/development potential today costs roughly the same or little less than what it cost in 2017 anywhere in Brisbane.

You may have bought extremely well or valuing your property way higher than the market.

Would a bank valuer assign $1.2m value to your property with knowledge that it last changed hands in 2017 for $810k?

 

I wasn't clear, I meant both subdivided lots. So about 600k each lot.

Also there are developers willing to pay above market value for certain sites where they know they can build an end product for a specific demographic in mind and make a healthy profit. One of the sites I'm currently building on in Brissy I was offered a good price to sell the site ( to a builder who approached me), but I wasn't interested. Just build it myself.

 

You are correct.

I know the Brissie market well. Very few people are prepared to buy a new property on 405sqm for $1.2m. If is is existing property it is unlikely to get past $1m even if it is new property.

People developing these properties are only looking at the surface of the deal. If you would have bought a splitter in Holland park for say 580k a few years ago ...would not give a significant profit. Because the median is 712k....assuming that sell price is $1.2m is 60% over median which would mean most banks would not value this product for finance. The real figure would be more like be around $800-900k.

Lets look at the numbers:

Purchase $580k
Stamps/Legals $20k
High end construction costs for 2 double storys $800k
Sell/Hold/Infra/Demo costs $150k

So the total cost is about 1.55m. Assuming that these sell for $1.6m-$1.8m. This deal is a very poor deal as this is an inferior return. Making 50 to 250k is poor return. If the market turns this will result in loss.

From my perspective....Brisbane has not delivered to date. You would have made more money in places like Geelong..Newcastle for much less capital.

 

1.42m Norman park 405sqm https://www.realestate.com.au/sold/property-house-qld-norman+park-130798686

1.45m Norman park 405sqm
https://www.realestate.com.au/sold/property-house-qld-norman+park-129012294

1.36m seven hills 405sqm
https://www.realestate.com.au/sold/property-house-qld-seven+hills-131774034

1.42 holland park 405sqm
https://www.realestate.com.au/sold/property-house-qld-holland+park-130815090

1.16m Mount G
https://www.realestate.com.au/sold/property-house-qld-mount+gravatt+east-127379282

There’s actually a whole bunch popping up in Holland park selling for 1.4m upto 1.9m with higher spec & city views... quite gutted I had the opportunity to buy 600sqm split level for $550k in 2014. Would be worth $850k+ now. The suburb has really moved

 

I loved it when people post facts in a debate .

 

Another one. This one actually shocked me the end sale price as some of the specs inside I'd call low spec. Especially the bathroom.

27 Stella Street, Holland Park, Qld 4121


Interestingly, Mount Gravatt East is pushing the limits now to see if they can achieve similar pieces. I don't know if they can ( yet) but the better the price they achieve, the stronger the implications for the few suburbs bordering it which are closer to the CBD.

31 Eyre Street, Mount Gravatt East, Qld 4122

80 Hoff Street, Mount Gravatt East, Qld 4122

 

Not sure you know Bris as well as you think

<300sqm blocks new builds
$1.052 Windsor
https://www.realestate.com.au/sold/property-house-qld-windsor-129855018
$1.085
https://www.realestate.com.au/sold/property-house-qld-windsor-129457806
Under Offer
44 Salt Street, Windsor, Qld 4030

405sqm blocks
$1.151 Cannon Hill https://www.realestate.com.au/sold/property-house-qld-cannon+hill-131266574
$1.315 Alderley
https://www.realestate.com.au/sold/property-house-qld-alderley-130536250
$1.2 Alderley
https://www.realestate.com.au/sold/property-house-qld-alderley-131068042
$1.45 Wilston
https://www.realestate.com.au/sold/property-house-qld-wilston-130834726
$1.315 Alderley
https://www.realestate.com.au/sold/property-house-qld-alderley-130992074
$1.1 Windsor (ugly old contemporary build)
https://www.realestate.com.au/sold/property-house-qld-windsor-130735590
$1.35 Windsor
https://www.realestate.com.au/sold/property-house-qld-windsor-129625766

 

Love your term ' ugly old contemporary' but I agree building that style now is just meh. I'm pretty sure their reason for some of those specs/ design features is feasibility driven though.

 

You have to pick your location for it. That one is surrounded by character qlder homes.

 

@Sackie @QldKoolies what do you find the market/demographics are chasing at the moment? and what guides you to pick? I know you hate the hamptons look but I find a lot of the demographics I speak too, maybe late 30s/40s are still really drawn to the grey/white Hamptons or scandi look. I know myself would personally pay more for the character over a contemporary build, suburb specific of course

 

Hamptons aren't too bad looking - saw a few at the display home.
It would be a pain in the backside to upkeep in the long run.
my preference are bricks home, maybe it is my Sydney upbringing that is showing.

Would only build a house to the suburb demographic. Otherwise just slit your own throat if you go against the grain.

 

I think your right, the Hampton look is definitely liked and in some cases, more than the contemporary. I think suburb specific is also very important. I chose contemporary for this build because of the lack of this style in the area, and some strong feedback from agents that it would be well received. It's a calculated risk

I'm about to start the design process on another splitter site , and I may go with Hamptons/ maybe more scandy for those ones ( in a different area). But still deciding on that.

 

Having valuations done for our place at the moment. Ive been keeping an eye on higher end sales for awhile. My list below

15 Glamorgan Street, Paddington - Sold July 19 ($2m)
43 Monro Street, Kelvin Grove - Sold August 19 ($1.2m, much smaller land size and smaller house)
34 Gillan Street, Norman Park - Sold July 19 ($2.25m)
20 Hobbs Street, Auchenflower - Sold July 19 (1.45m)
10 Prince St, Paddington - Sold August 19 (1.825m)
12 Charlane Avenue, Indooroopilly - Sold September 19 (1.8m)
9 Woodcock Street, Paddington - Sold March 19
37 Annie Street, Auchenflower - Sold March 19 (1.5m)
65 Prince Sttreet, Paddington - Sold Oct 18 (1.8m)
6 McNab Street, Paddington - Sold Oct 18 (1.65m)
4 McNab Street, Paddington - Sold Nov 18 (1.92m)
5 Ross St, Paddington - Sold Dec 18 (2.36m)
59 Park St, Kelvin Grove - Sold Dec 18 (1.25m) (smaller scale reno, smaller house same land size)
20 Rusden St, Kelvin Grove - Sold June 18 (1.25m) (Old weird house but similar size land and location)
11 Hampson St, Kelvin Grove - Sold March 18 (1.4m) (Smaller reno, bigger land)
27A Broadhurst St, Kelvin Grove - Sold Jan 18 (1.435m)
25 Bally St, Kelvin Grove - Sold Jan 18 (1.25m)

Vast majority of these are 405 blocks, higher end have decent views or are closer to amenities. Doesnt include any Graya developments which if you follow innerwest they have achieved record sales on most of their builds.

Theyre now branching out to Windsor, Holland Park etc. As a buy and hold Brisbane isnt much chop but add value market is pretty great in the inner city with much lower capital requirements than Sydney or Melbourne

 

Awesome post. You mentioned something ( a nugget of gold) in your post that I'm currently doing DD on and site searches. There is sooo much potential in Brisbane, it still blows my mind. I think most mums and dads can't afford the price points where it makes sense to add value and also the knowledge of the DD process for specific pockets where developing is worth the risk.

Agree, the Graya brothers are awesome.

 

Agree its mostly a specific skillset in what can be achieved and for what price in the big renos. Lots of pitfalls and opportunities for cost blowout.

But that inner ring isnt getting more land available and majority of the north side has character overlays which protect things from overdevelopment of units/townhouses etc.

 

The 64k question....can you make a profit ...some of these have very high end fittings...assuming a base of 400k land (assuming a splitter)....650-700k to build....and another 150k in holding/selling/etc. Where exactly is the profit?

These are way over medians......something to think about if you are going to be Mr/Mrs Developer....

 

Definitely. This is where enlisting very specific consultants is crucial imo.

 

As soon as I see character overlays - I just keep searching for the next property.
I don't want the hassle in my investment...
For those that are astute renovator - what's your take on those character homes? It isn't a lick of paint, new bathroom, kitchen and flooring?