QLD South Brisbane apartment

Discussion in 'Where to Buy' started by Wanqi508, 26th May, 2020.

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  1. Wanqi508

    Wanqi508 Member

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    Hi, need your experience and advice. Thanks
    I have a one bedroom one bathroom no car parking, 3 years old apartment investment in South Brisbane, used for short term letting. I bought it at 350k and now sales agent evaluating at 270k. :( I an considering a decision to sell it to put money in other property market. I'm hesitating to take such a big loss. Not clear if keep it for next a few years, it can go up some, hopefully. Anyone over there is in a similar situation, would you please share your experience and possibly advice.
     
  2. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    So including agent, marketing and solicitor fees you'll be short another $15ish thousand ?

    It's a pretty big move to take such a big hit on losses, especially when it's not guaranteed your next property will explode in growth.

    Is the current property neutral or positive geared ?
     
  3. My House QLD

    My House QLD Well-Known Member Business Member

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    What is the weekly rent? And costs per week including strata and rates and management fee's?
     
  4. Wanqi508

    Wanqi508 Member

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    Thanks all for reply. Rent is $1400ish/m before last month, then $0 due to coronavirus lockdown. Its short term leasing and no tourist now. Negative gearing and stata is about $6000/year, rate at $2000ish. So not good performance.
     
  5. wylie

    wylie Moderator Staff Member

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    Ouch!!! That's a lot of strata and rates for not a lot of rent, back when you were getting rent.

    Do the numbers improve if your rent it longer term, and not as short term rental?
     
  6. My House QLD

    My House QLD Well-Known Member Business Member

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    How big is the mortgage? Have you spoken to more than one agent?
     
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  7. Wanqi508

    Wanqi508 Member

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    My question seems is, if wait for a few years, will the Brisbane apartment market back?
     
  8. Perp

    Perp Well-Known Member

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    I wouldn't count on it in the next few years, no. I live in South Brisbane and there has been a huge influx of stock the past few years, and there's a lot still being constructed. Demand is also growing and will absorb it, but I think it'll be more like 5-10 years.
     
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  9. My House QLD

    My House QLD Well-Known Member Business Member

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    South Brisbane apartments didn't do much in the recent Sydney - Melbourne boom. Given the state of the economy now and the current pandemic I can't see much of a bounce happening myself.
     
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  10. Elysium

    Elysium Active Member

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    I own a 1BR w parking in South Brisbane (Ivy & Eve building) in 2 year old luxury building. Paid 450,000 AUD, rented for 420 AUD a week before all the countless strata, sinking fund etc..

    I don't have a mortgage and it makes approximately 2.5% NET per year. It sucks and not making much income from it, but at least it isn't losing me anything.

    From what I can see, values have not declined, they have remained flat thus far, so I don't quite understand how your unit went from 350k to 270k.

    The only reason I am not selling is because the AUD declined significantly against the USD (and I am a foreign buyer) so even if I recover my money, I would make a 20%+ loss when converting it back to my currency.

    My trip to you is: Find a long term tenant. According to my calculations the package deals proposed by the greedy management companies (to turn your unit into a hotel basically) are not worth it. Just to break even on their expensive furniture packages would take 3+ years.
     
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  11. craigc

    craigc Well-Known Member

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    Not a recommendation for your situation but currently AUD/USD ER is 69.30 and Westpac group predicting to break 70 in the next few weeks.
    Not sure when you bought, but if as stated above E/R was the only reason you were not selling It might be worth looking again.
    Not advice as the E/R could be very different by the time you sell.
     
  12. Elysium

    Elysium Active Member

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    I bought em in 2018 when the AUD was worth around 15% more than now, so there's a long way to go I think. Will keep them for as long as it needs, hopefully selling within around 5 years.

    All the fees us condo owners are being charged in Australia are absurd, criminal. HUGE "strata" payments, "sinking fund" and the fee you pay towards the operation of the building (security, maintenance, insurance, cleaning etc) is also way out of proportion. Add a 140 AUD yearly "smoke alarm testing fee" to really bend you over as well as "council rate". You easily lose 45% of your rental income and that's before income taxes.

    I own a few properties in other countries, some in nice buildings, and I don't feel ripped off by any of them nearly as much as in Australia. It's too bad, was considering moving into one of them Brisbane flats myself, but the costs, even as an owner, are absurd, and I bet a nice chunk of that ends in some "manager's" pocket. There's no way a brand new building needs to cost that much to operate.
     
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  13. Noobieboy

    Noobieboy Well-Known Member

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    Unfortunately this often happens to foreign buyers. Generally speaking Australians (including migrants once they understand the market) very rarely would go for OTP apartments. In my circle no one did. If they have to go for an apartment, it would usually be in a walk up block of 8-16 units. Preferably no lift. Well maintained. No 24h security, it’s one of the safest countries out there.

    Each country is a different market. And it’s important to know that in Australia the owners occupiers are arguably the price makers, investors are price takers.
    Owner occupier would rarely look at shiny high rise with pools, gym, security etc.
     
  14. Elysium

    Elysium Active Member

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    Yep 100% correct, I learned this the hard way. Foreigners are not allowed to buy any old property, we are only allowed to buy in brand new projects that were completed no longer than 12 months ago, hence we have few choices except for those new towers. That said, my 2 units are renting out extremely quickly, within 1 week of becoming vacant, so there is still demand for rentals there, which is at least something reassuring.
     
  15. Noobieboy

    Noobieboy Well-Known Member

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    I think South Brisbane will always be high demand for rentals. Great suburb, great transport, close to uni and CBD, next to the river, the list goes on. It is a great suburb. I wouldn’t be worried from rental perspective :D.
     
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  16. Elysium

    Elysium Active Member

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    Thanks, happy to hear that..

    The flat in Toowong (Illumina) is also renting out quickly, at least for the past few years. Fingers crossed that it can remain that way for the next few years until it is sold.
     
  17. boganfromlogan

    boganfromlogan Well-Known Member

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    We have been looking at apartments in Brisbane East and North East, and it is very very patchy if you are a buyer. Not that much to choose from, and a mix of very low priced units (especially if no parking, or old etc) and quite highly priced nicer units. Don't understand why. My only rationale is that bargain hunters are lining up for distressed sales, but they are few and far between.
     
  18. Pumpkin

    Pumpkin Well-Known Member

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    Just found this thread..... We are about to start looking in that area, getting ready for investment.
    Your numbers scare me..... If Levy for your One-Bedder is $6k, how much would be for 2-3 Bedder?
     
  19. iloveqld

    iloveqld Well-Known Member

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    If it were mine, I would sell it. Not an advice, DYOR
     
  20. Nathan Prasad

    Nathan Prasad Well-Known Member Business Member

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    I would suggest at looking at ways to increase rental yield. The beauty about real estate is that it can be forgiving over the long term.