QLD What price point for best growth for Brisbane houses? $550, 650, 750, 850k?

Hi there!

I'm currently chatting with two separate property firms (one BA and one Fin Adviser who works with another BA), both of them are recommending Brisbane right now and they both believe the best growth comes from properties in houses 'up to 850k' range.

I agree with them on houses being better for growth, but this price point seems too high for me.

Do we believe that properties in this price range (houses in inner suburbs) would perform better (in general) that those in at say the $550-650k mark? (say, a 3 bedder Queenslander on 400m2 in 'good' inner/middle suburbs, with possible value-add potential).

My view is that in general a $600k house would perform roughly the same with something at around $850k, but with less risk (better yield, less debt).

Thank you.

 

I'm more conservative in nature so my sweet spot would be around the $550-$650K mark in the current market but it also depends on the specifics of the property/deal as well. Let's say a $850K house has a very unique/desirable feature which generally other properties don't have (ocean view/walk to beach for example) then potentially that could impact my decision making process.

In general I would tend towards lower valued properties due to:
1. Spreading the risk - multiple lower rental income rather than one big single rental income
2. And definitely agree with your point on better yield so will be easier to hold out long term.

Why not do a poll and see what people would vote against? Will be interesting to see the outcome that's for sure.

Cheers,
David

 

Good suggestion! I have added a poll.

 

I think 6-800k offers some really good OO stock in high demand areas.

For me, Brisbane is all about 3 things for potential best returns:

1.Great OO Location ( also reduces the chance of deadbeats holding your rental hostage)
2. House
3. Add value ability .

 

Im not impartial to a house on 405sqm that can't be split but purchased at a great price.

 

I'm with you on that . If you can get an older house on a 405sqm but great location and good add value gap from current state to renovated then im totally on that bandwagon .

 

Hi all. First time posting here.

Would you be talking about properties like this?

Legal height underneath. Needs a paint job and some landscaping.

What kind of price would you want to pick this up for?

9 Bardsley Avenue, Greenslopes, Qld 4120

 

Grazer,first cab off the rank,check the BCC Flood maps ,as residential property runs much more on emotions .
Anticipating trouble is a key strategy in real estate or any investment ..imho..

 

Yeah that's a good place to start. it does sit on the 1% flood chance, neighbours are 5%. It's also close to a main road and may get a fair bit of noise.

Is in a nice suburb but bad location inside of it. I assume this would be enough for most people to pass. Probably why they haven't sold yet.

 

I'm not sure why anyone is advising you to buy using price as your criteria. You will find million dollar homes in "cheap" suburbs and cheap properties in expensive suburbs. Pick an area that is suited to growth for reasons that you have researched and then buy the most in demand property for what people want in that area and if you can afford that price, great. If not, move on to the next area.

Frankly, I'm astounded a BA would advise you to buy on a price point criteria.

- Andrew

 

That's a very good point and precisely how I go about it. I let value guide my decisions and if I am able to afford the value I'm in, if not, I look for other value deals then see if I can afford it.

First let value drive the decisons not price.

 

They do it because they believe it's houses in owner-occupier inner areas that get the best growth.

And, as we know, these are the $$$ ones, $850k etc in Brisbane.

They believe these properties will grow at say 7.5%+, whereas if you only spent $500k it would grow at 5% or less (as an example, not exact numbers) over the long term 10-20-30 years.

 

That reasoning is still buying according to best value. The price factor comes in after the fact.

Personally I'd only ever invest in houses too in Brissy , especially if my budget allows for it.

I have a general rule I stick to .

SYD: All dwellings depending .
MELB: All dwellings depending
SA: Houses
QLD: Houses
WA: Houses
ACT: Houses
NT: N/A.

 

My best performing property in Brisbane was purchased in early 2017 for around $850k and currently valued at $1.2 million.

I don’t hold any under $500k properties but know many who hold plenty of those and whatever little growth they had seen over the years has been wiped out in last few months.

 

Basically the higher price points are in stronger OO demand areas hence their superior performance . In time, ripple suburbs will see stronger growth too. But will happen alot slower than syd and melb.

 

You are looking at around $650k to $680k. Take away proximity to flood zones and main road, and this could be worth around $800k.

 

I suppose this question can be phrased another way -

If you were to list all suburbs in Brisbane metro area, descending by best 10 year capital growth over pretty much any given period in the last 50 years, would (more often than not) the more expensive (but not most expensive) inner owner occupier area houses be up the top of that list?

 

I hold plenty of <$500k properties that have seen fantastic growth over the years and the higher yield has allowed me to build a much bigger portfolio than just buying a few higher value/lower yield properties where (in the past at least) you hit your borrowing wall much sooner.

It varies from portfolio to portfolio but it’s still better to have lower % growth on a higher absolute value in a lot of cases with the added protection of higher yield than to have higher % growth on only a few properties.

Orion I think you may have missed the point on this one as it’s exactly what you shouldn’t be doing. I understand the general perception behind the suggestion but it just doesn’t work that way.

- Andrew

 

250-300

Cliff

 

Cowboy in the wild west.