QLD Toowoomba?

The value for money of residential and commercial property in Toowoomba seems good. I believe it's a great local economy and it has huge economic growth potential with what is happening around that area.

Can somebody please share their thoughts?

 

Hey @Mickg123,
I haven't done any DD or research in Toowoomba, but there was big hype about the place 24-30 months ago.
Has already seen some solid CG.

I also posted this thread earlier in the week: POLL: Which South East Queensland LGA will experience the most capital growth in 2016?

Of the 110 or so votes on there, 3 ppl voted Toowoomba for 2016.

 

There is still a big hype in Toowoomba, feeding from the Wellcamp airport commercial opportunities. IMO once that gains traction, increase in jobs (agri and office jobs), will lead to population growth in the area which will lead to more demand for property. Local government is also boasting that large corporates and multi-nationals are adding Toowoomba offices or re-locating to Toowoomba if that's where the opportunity lies for them.

It could be a matter of time before we see the correct indicators..

 

Can you please tell the people with the hype to buy my house please.
Yes there are plenty of jobs around and some more projects coming through which will be great for their economy.
In 12 months, twice as many houses have hit the market for sale, they are building a lot of new homes in the area which has brought rents down and starting to cause an oversupply. , By 10-20 a week rent drop, vacancy rates when I first purchased at 1%, now at around 3-4%.
You can get good cash flow propertys, their also building tiny new 3bed/2/1 on tiny blocks under 300sq. They sell for under 150k.
I've been on the market for a couple weeks and hope to take a very small profit(10% over 3 years). Hopefully if I can sell, otherwise I'll rent it out again till I can.

 

Thank you Barny, its good to hear a real time example. You dont want to hold onto the property for a little longer?

 

I feel a major correction will be happening in Australia so I wanted to reduce as much of my debt as possible, and take the profits while I can.
Regional areas can be great for cash flow, but when markets move, they can cop a hiding. I feel Toowoomba is going to cop a hiding.
I could be wrong, but not going risk it for a little profit.

 

Hi @Barny,
What are you numbers on your property i.e. purchase price, yield?
If you don't mind sharing.

Cheers,

Taku

 

I want to know too

 

Purchased a 3 bed/one bath/single garage 600sq block (harristown) late 2012. 265k, rented for 330 a week since.
Hopefully sell for 325-330k.
Only had one offer so far but a little lower. If I can't achieve 320+, then I'll rent it out again, perhaps. And sell off one in Melbourne.

 

not bad in terms of yields.

 

After Brisbane's cheap end moves further north, investors will start to look at Ipswich and then Toowoomba if not already

 

I second Special order's suggestion but I think real growth will be a few years away after Brisbane has done it's thing and the second range crossing has been built. I can't see rents increasing due to the oversupply that took place over the last two years and continues to be maintained with new construction although I believe there are opportunities to create equity and cashflow neutral properties through developing and the potential for positive cashflow if you are a builder or developer and can save costs.

This

MasterView 2.0 Application Master

development gives you an idea of what's possible if you were looking at five units but less is definitely possible. You can do a feaso based on all of the DA documents that are available and see that it's pretty viable.


Jeremy

 

I believe Toowoomba has had its growth from 2012-2015, I reckon it's gonna be flat for a long time or decrease. Spoke to another agent in Toowoomba early morning, and she mentioned people don't want the units their building. This info came from her husband, who's a builder.
Don't have anymore info to back this up, but they are defiantly flooding the market stuffing up rental prices or vacancy rates if sitting empty.

Also she mentioned there has been erratic behaviour in the Toowoomba market in the last 12 months. Said lower end propertys like mine aren't selling well, but million dollar homes and close to, are selling very well. What does that mean? Cheap credit so people buying up?

 

Vacancy rates appear to be rising steadily since 2012 and a little more sharply of late. Hovering around 3.9 %. Unemployment has also risen however still well under the national figure.

Would the fact that this new product is unappealing to buyers/renters there lead to some safety in buying older stock on good land (or with reasonable land component) and weathering any rental wars with not increasing rents in current investments (or maybe dropping slightly) till any storm is over.

There still appears many positive infrastructure drivers in this city and it is not a one industry town. If coal seam gas and other mining activity in the Surat Basin is on the nose for several years, I doubt it matters much as this was the cream on the cake for Toowoomba

Yields appear reasonable when compared to capital cities. Just me thinking out loud. I haven't been there for nearly four years so can't comment on the new stock being built or in the pipeline. I have had a few alerts come to my inbox of late and my interest has been piqued so keen to see this thread.

Anyone else care to add to the chat especially if they are on the ground there or are reasonably invested in Toowoomba.

 

Give you an idea of what 4 bed homes sell for, around 15 years old, block sizes 600-750sq.....350k, but they need to be clean and tidy. Such as this below for example

Sold Price for 6 Weir Court Harristown Qld 4350

3 bedroom, similar blocks, under 15 years old neat and tidy sell from 320-345k

Newer stock coming on the market all the time now, and much more coming this year when completed mid year I hear.
This is an example of the tiny crap that's coming on the market.

Sold Price for Proposed Lot 67 Glenridge Estate 728 - 736 Boundary Street Glenvale Qld 4350
145k sold.

This is a bigger 618sq block, 3 bedroom, these newer places are selling at 370 and up. 4 bedroom 400k and up.

These areas are the west, the east is the most expensive areas, but all developments are really occurring in the west. And better yields obviously.

Older stock over the newer tiny boxes is definitely the smarter move. You can even buy older homes for 250k with 1000sq blocks.

Toowoomba isn't reliant on mining and isn't a one town show, which is why I bought there when I did. its a beautiful place and the people are awesome to talk too. Always out to lend a hand if needed.
But looking at future growth, the population is around 150-160 thousand. It increases better than any other regional area, but it's still really low numbers compared to any major capital city. So with all this new stock coming on the market, I ask who is going to buy it? What's it doing to current house prices? And rentals?

I personally see better opurtunities purchasing in Melbourne than Toowoomba at the 350k mark.

Love to also hear any other feedback or thoughts from others please?

 

Thanks for sharing that Barny. That's a crazy price even for a shoe box on the postage stamp lot. Even factoring in the rent guarantee (which is built into the price) I can't fathom the margin the developer might make. It must be skinny. Obviously the finishes aren't what they've shown in the advert, but I can see how interstate people might be enticed. This is quite a way out of the main town centre though. Eventually these will be difficult to let and re-sell, however the short term pain it might create to the rental market in the Toowoomba region needs to be considered. Are they building units in town, viz suburbs like Newtown, Toowoomba central, South Toowoomba, etc.? I personally like land with an older house on it that may have future options. These need to be in-fill locations. Also blocks of units appeal to me.

Keen to hear other's thoughts and opinions.

 

Is there not one other person that invested or knows Toowoomba market?

 

We purchased Toowoomba (Newtown) late 2010/early 2011 - $216k. Basic reno (paint, flooring, bit of a garden tidy - sub $10k anyway), had re-valued last year for just on the $300k mark. Was renting at $285pw - agent has advised that rent will have to come down $5-10pw - house has been vacant for 10 days now.

Reason we purchased this place: it was 960m2 on 2 lots - we've got a DA approved to build a 2nd property on the rear of the block, but holding off to see what the future holds for the city.

Was out at the airport and new refuse facility last weekend, pretty impressive setup!

Barny, could you let me know who your managing agent is; if you're happy with them please? Looking to change - currently not happy with the service I'm receiving.
Thanks.

 

Thanks for chiming in @Icarus. Are rents softening across the board there in both houses and units/townhouses? Some tempting yields on purchase price are around, however researching rents for comparable properties indicates the current rents on the selling properties a bit rich (probably still on lease) and may need to be adjusted down as you have needed to do. Is this the current theme there?

 

This appears to be the case at present @Player; original predictions for the change of lease were up around the $320pw mark when I spoke to the PM early/mid Jan - since then, the tune has changed and we were advised to come down $5 pw from current result.
PM has advised oversupply is the cause, along with a slow down in inquiry - I'm thinking possibly an inexperienced PM playing a major factor, hence the reason for a change.

Can't comment on the market in general though, I've let things slip a little recently in terms of market watching - been focusing on other areas too much.

@Barny I realised that I didn't tag you before.