WHERE & What would you buy at the moment?

+1 For Brisbane. Going shopping this weekend.
Perth is getting more interesting too

 

+ 1 for Brisbane
+ 1 for Perth

 

Just curious, which suburbs you are targeting in Brisbane.

 

Maybe i should have called it SE QLD
Spreading some offset account $$ around in my wifes name(earns very little) so looking for 6%+ gross yield and somewhere to pay down quickly to park excess cash ongoing. Slacks Creek, Beenleigh and Goodna have houses on the shortlist atm. I already have one in Beenleigh which ive been happy with.

 

It's actually a lot worse than I thought to be honest, well, at least in Melbourne. I think the handful of suburbs I've looked at have copped anywhere between 80-150K on average book loss cf when I was looking in early to mid 2017. This is about 10% in most suburbs I've seen.

There is one in Glen Waverley in it's blue chip zone as well (school zone, amenities, train station) which I quoted in another thread which sold in 2016 or 2017 for $2.25 mil, was on auction last week asking circa $2mil but there were not one bid. The agent approached one of the prospective buyers there and said owners are willing to part ways for $1.9mil, thats a whopping 350k loss.

Funnily enough a lot of my friends/family relos who dodged the bullet of the peak in mid to late 17 has now jumped on boat, mentality that even if it does dip further its close enough to bottom that they are confident things will go back up.

 

Disagree. I think now is a perfect time to be pounding the pavement in Sydney.

 

Depends on goals, strategy and timeframe . I am getting very excited about certain markets in Sydney atm and am preparing a buying campaign for add value stock mid to end 2019 into 2020.

Brisbane also has good longer term deals. Waiting for Perth but i think it will reach my risk profile to pull the trigger soon. SA , NT no go for me.

 

You would be buying right now in Sydney....?

 

If I had the cash (I'm maxed out), I'd certainly be making some silly offers.

 

Declines are accelerating at the moment (-1.4% last month in Sydney) - they are not suddenly going to stop. Once monthly declines start reducing to say -0.1 to -0.2% a month, it might be worth jumping in but it would be extremely brave to do before.

Auction clearance rates are a leading indicator so good to watch - they are currently saying there is lots of pain to come.

 

Nonetheless I'd be doing it now, given there's not a sniff of positivity in the market.

The moment the market begins to turn or when sentiment starts to improve, you've lost the initiative at the negotiating table. What do you think happens when people think the market has bottomed? They come out in force chasing the same tail.

Anyway, each to their own. If it were me, I'd be hitting OFIs big time and being a hard ball negotiator.

 

FWIW going to contract on 3/1/1 in Goodna. Should gross yield 6.5% - 7% after all closing costs. Will post more detail in near future. Tested a few with offers in Beenleigh but couldn't get them to bite to get the yield i wanted for that area (5.5%+)

 

Congrats!

 

Details on what i bought in Goodna.
3/1/1 Brick Veener detached garage and shed on 700m2+. Expecting $320 rent after $5k spend to clean up.
Building very solid, Kitchen and Bathroom good condition(maybe tile paint bathroom for cosmetics. one bedroom may need carpet) and quick paint(current paint OK but tired).
The numbers:
Purchase Price $237500
Gross rental yield apprx $15 k assuming no vacancy - but no big deal if vacant for periods. In fact wont really hurt me if vacant all year from cash flow perspective.
Will put in $60k Cash(as i need to park some). includes stamp, minor reno and 20% deposit
Finance $190K
Interest on finance $7600
Rates approx $2K
Insurance approx $0.6k
Free cash flow approx $5K
Return on Csh approx 8%
Will pay off with 2-3 yrs.
Will pay no tax or very negliable amount on rent once paid off.

No land available for under $170K in area. Borders Bellbird Park where price of land a few streets away is $215k+
So i look at it as a house well under replacement cost, good yield, self funding at 100% finance

 

According to an article published a couple of days ago - I think it was your investment property magazine survey or one of those type of industry survey things - Brisbane was still the most popular place to buy at about 44% of investors. However I noticed there was a disproportionate amount of the respondents to the survey owned iPs in Queensland which I thought was interesting. the survey was not very good at picking up respondents who owned properties in Sydney and I'm sure there's more people only more property in Sydney then in Brisbane. We've seen that surveys result for the last couple of years that Brisbane has been the most popular place for propertu professionals or investors. however that data is obviously a little bit biased by vested interests.

 

Great price. Flood free?

 

Yes. Not interested in flood zone properties it blows out insurance costs and kills the net yield

 

I would buy in Somers of Balnarring beach if people there sold their homes

 

Past returns are not indicative of future returns.People who invested in Japanese stocks/assets 30 years back are still waiting for their returns

 

Merricks/Balnarring Beach is set to become more popular as the suburbs have only just joined the $1m+ median house price club.

Balnarring has also been the 8th top suburb in Victoria for capital growth in the past year to a median price of $878,068 today (25.2% increase).

‘Demand from cashed-up city buyers and very limited supply in Fingal and Balnarring Beach have seen median house prices rise more than $300,000 in just 12 months. Both suburbs are among the top 10 suburbs for price growth in Melbourne and also entered the million-dollar club this year. In Balnarring Beach, houses gained $300,000 to a median of $1,162,500 in the year to May 31 2018.'

The DSR Score of Balnarring Beach is good at 36 and 33 for Somers and has increased in the past 2 years. Online search interest is also high and has increased in the past 2 years. Stock on market is very low and has dropped significantly since early 2017. There is also no vendor discounting going on.

Days on the market have declined significantly since early 2017 in Somers and online search interest is also high and has risen since early 2017.

22 Hansens Lane Balnarring Beach also sold for 6.5m in 2016 and shows the quality of homes in the area and how expensive the premium end of the area is. 79 Bayview Rd Merricks Beach is also another quality home which was priced to sell at $2.5m.

Balnarring also has newly built quality homes such as “Balnarring Retreat” which was named best new house under 200sqm and has won national architecture awards.

Nearby Merricks also has a tightly held premium market where a “modern country” house is aiming to become just the third property to sell in Merricks this year for $5.5m- $6m.

This humble 'country house' façade hides a stunning $6 million home | Daily Mail Online
Country cool: The designer home in Merricks that turns the farmhouse concept on its head

Even merricks north has $2 million dollar plus properties. 218 Bittern-Dromana Rd had a $810,000 price rise in under four years. It had 11 offers and sold $375,000 above reserve in late 2017.