Units in Brisbane suburbs

Hi guys,
Looking at the trends for units in suburbs close to Brisbane (any direction within 3-5kms), which is rents & prices going down, any view on when the bottom of the cycle is likely to be? I understand it is typical for Brisbane to move from undersupply to oversupply quite wildly at every cycle as the cost barrier to development is far lower than Syd. I have read the largest ever pool of developments are due for completion in mid-2016 and expected to start decreasing in 2017, but wondering if vendors will be more desperate than now to flog their unit with a discount, and then ride slowly the move back up in the longer term.
Yann

 

Hi @Yann
As you are already aware that there is an expected over supply of units in Brisbane, what are your reasons for buying a unit?

Is this your first investment property?

 

The amount of developments coming on line in 2017 might actually surpass 2016... just this past week two more mega-resi towers in Brisbane have lodged for DA.

 

Yep..apartments are long term hold.
Definitely not short term holds..
In the lomg term , you'd be laughing.
buyer preferences are changing:
No Cookies | The Courier Mail

 

Yes..this is one of them..
(At least its designed well and looks good)
76 Storey Queen’s Tower Proposed for 545 Queen Street | BrisbaneDevelopment.com

 

Or 'do not holds'.

The sky provides no impediment to ongoing supply.

 

I wish I had bought a unit in the Sydney CBD or just east of it 20 years ago... I wonder if I will be saying the same thing about Brisbane in 20 years?

 

Lets assume they will be, its still not a great idea to buy high strata stock in oversupplied markets, with prices dropping and most likely will take a looog time for CG. Also if you want to extract equity from it asap to reinvest, aint gonna happen. Really not a good strategy from my perspective.

IMO Brisbane is mostly a housing market. If you financially can afford to buy a unit or a house as an IP, its a very easy choice for me.

 

Depends, how expensive are houses going to be closer to the city in 10-20 years? A good unit for someone who doesn't want to maintain a house and yard could start to look attractive as it now does in Sydney as people simply cant afford a house.

But I'm not saying to buy now, but I think if there's a decent unit correction could be a good time.

 

Definitely investors freaking out atm and prices are dropping. I'm not sure when the bottom will be though

 

Maybe he wants to live in it. I hear they are quite popular.

 

I am a fan of units in the burbs. I think there is a risk of oversupply in the CBD but not the burbs. The big developers don't agree with me on that though, 2 more 90 storey towers are going ahead within near my office.

 

I'll wave up at you in your office when I see you on site across the road.

 

I agree with you here. I think that the 6 packs or a complex where there is nothing more than16 units spread out across a decent block of land in the suburbs will still do well. There is no way that I would buy in any of those high rises in the CBD.

 

Yes, this is what i mean. Long term holds.
In 20 years, the buyer preferences will be more concentrated in brisbane as the article suggests. For long term holds, thats where you want to position yourself.
Look at places like pyrmont in sydney 20 years back- no one wanted to touch it...now look at it- can anyone afford it?

 

Agree with this..however depends on what you are looking for and time horizon. I know plenty of people who have no interest in real estate ( development, maintenance , keepimg an eye on values etc) and would rather just have a buy n hold strategy with minimal maintennance and work for the long term . They spend their time on other things - career, shares etc.
Not saying one is better than the other...just that ther seems to me to be a shift to the latter and that will see the demand in the long term.

 

I woulf agree with this. Units in burbs should see less risk of oversupply in short and med terms.
Need to ensure its well locatd with amenities and public transport closeby.

 

I'm on lv 17 so can you wait to you get a bit higher, getting old and my eyesite is not what it used to be

 

Thanks all for valuable inputs. I already have a couple of IPs, all 1 bedders in suburbs close to CBD (mostly in Sydney) and they all did very well recently. I was looking at replicating this strategy in Brisbane, and agree with previous replies, it will be again 3 to 5 kms from CBD in small unit blocks on large lands. I do not see any oversupply of those either, but the massive oversupply in the CBD/valley/Southbank brings down all prices and rents irrespectively. And when I see prices and rent going down, I pray for a doomday to invest.

 

There is so much new supply coming that it could take a few years to play out. There are cranes everywhere, I can't see many selling at a discount presently, why would they? Interest rates are low and the local job market in improving.
Some might not be able to settle their otp purchases though.