Where would you buy in a budget of $450k

Hey guys, with Sydney and Melbourne market going backwards, impact is seen on other markets as well, I believe.

I already have an IP in Kallangur (QLD) and agents there have been saying they don't see any growth in near term. I am saving to buy my next IP within $450k budget. In these times of uncertainity, specially with Labor bringing new laws around negative gearing, where would you buy?
Dont want o buy in QLD as already have one there.

Appreciate the comments!

Cheers

 

If I had to buy before the end of the calendar year and that was my budget and I had a long term view I would look for houses in:
- Northern Brisbane Hills district (2 or 3br house)
- might even squeeze a 2br house in Latham or Spence (ACT)
- Potentially Perth (but i dont know enough about that market yet)

 

Perth

 

Hi, I like your thinking @Jamesaurus with Canberra... market has been doing well and going up. I never would have thought about looking for 2 bed places, but makes sence to look at both 2 bed and 3 bed places.

I lived in ACT for 22 years, now in Melbourne.
I am more familiar with Tuggeranong, Woden areas etc. But some good growth up there lately. Still don't fully understand why, but I feel Canberra has ALWAYS been hard to find cheap property, which is good for investors, plus limited on where you can live. Not a huge place like Melb, Syd QLD etc... total land in ACT not that much.
Plus highest salaries in the country means people have more to spend on property.
I have read recently that Gowrie and Richardson are going up in value. Gowrie has some very big/nice houses and some cheaper ones down the bottom of the hills.

After doing a quick search for Gowrie, Richardson and nearby areas I found some interesting properties.

8 De Lacy Place, Chisholm, ACT 2905
911m2 of land!!! And only $445K... not bad. I suppose the house is really small but, damn this has potential, (landwise!)

Also this one in Gowrie:
2 Kibby Place, Gowrie, ACT 2904
I think its about $400K+, Probably 425K or 450K might be what they are asking, not sure.

 

Freestanding homes in ACT not a bad choice, also consider coastal regional areas close to major cities. I am biased but there is good infrastructure spending on the NSW south coast ie Nowra has new highway and hospital expansions and plenty of homes in the 400's and other options include central coast/lower hunter, tweed is also good if you can find something cheap enough, bit trickier to get under $500k there however.

Buying near new infrastructure with high land content with renovation and/or development potential is best insulator to bad markets in my opinion. Bonus is grandfathering tax benefits too.

 

That assumes a Labor Government and they get their policies through.
Are you calling a Labor win in the May federal election?

 

Reno your Kallangur property if it has potential and sell, then buy again some bargains. Still I think QLD has potential. Near Middle ring with your budget.

 

You are right about the assumption - I am a terrible political analyst/commentator and only going on what my dad says (who watches such things far more closely than I do). I hope he is wrong but he seems to be usually right in this arena.

 

Thanks guys for pouring in your thoughts.
How does Ballarat and Geelong look at the moment? Is anyone looking at these?
Perth still seems to be taking time to pick up momentum. Not sure of Adelaide though!!!!

 

If I have to put my money on it vs Libs..... then I think yes...most likely it will be a labor victory, question is by whatnot margin

 

Higher land tax scares a lot of investors off- just make sure to have this accurately factored into your calcs.

Some of those bigger blocks would easily do a nice GF on also, but I'd be picky on which pockets/streets within the specific suburbs too. Look at census stats and walk around the neighbourhood in day and night time. Also some of the 2br houses with extra living areas could be converted to 3br with a knock up wall. Hope this helps

 

Nowra is reasonably spread....any specific area's you can recommend

 

Some great suggestions.

Two quick things about ACT / Canberra that turn me off at least:

1) Land tax is high (already mentioned);
2) For me, I don't like that the property is all leasehold (the land is owned by the crown). I would prefer freehold title in one of the states. I am a very long term investor ....

Cheers,

John

 

The property cycle says you should probably go Brisbane. Huge population growth there and economy is going much better there now. I know you don’t want brisbane but Moreton Bay Area ticks a lot of boxes. $400k for a 600sqm block is a bargain with a 5% yield. Or spend 100k more and put a granny flat out the back. Would be close to 8% yield then $$$

 

I am not so sure that Brisbane really is that relatively cheap compared to Sydney. Remember they had a boom along with Perth when Sydney was bumbling along.

I wrote an article 9 months ago, with a Sydney: Brisbane price ratio chart. Even then, the ratio was at the long term average, and given the moves since this was written, my guess is that Sydney may actually be relatively cheaper than Brisbane right now compared to historical data.

That doesn't mean that the trend is your friend necessarily, but I am not convinced that Brisbane is that much cheaper than Sydney.

Check this out written 9 months ago - Sydney vs Brisbane (State of Origin of Property):

Sydney vs Brisbane - Property State of Origin! - Bridge to Bricks

 

It's not that spread lol. Better to say what to AVOID. Flood risk areas. Public Housing areas. Bushfire risk areas unless you are ok with that sort of thing. Granted there are significant differences between each quadrant but as long as the immediately surrounding comparable sales justify a deal - I have been active buying for clients in all major segments of the town - however there are certainly streets I won't touch. You really need to understand it on a street by street basis to avoid the bad bits.

 

Whatever you buy - assume you will have to pay P&I at some point so make sure it has strong enough income to manage with that

Cash cows rule in this era

 

Herron todd white data still has Sydney in the declining market phase of cycle. Why buy there when you can get it cheaper in a year? Melbourne is also in the same phase but don’t think it will drop more than 5-10% more. I’d prefer to pay 600k for a house waiting a year, than buying now and paying close to 700k.

Brisbane at the start of the recovery phase. Cairns, Ipswich, Mackay, Gladstone and a few other places also in this phase. However I avoid country towns and regional areas. Actually I avoid everywhere but Melb Sydney and Brisbane. That’s where the population and jobs are.
I’m going brisbane for the next few years I think.

 

I'd vote Perth. $450k will get you something pretty decent and vacancy rates are dropping and yields picking up.

 

Electric Cars ( whether here or worldwide) + Lithium = Perth will have a bright 2022/23 and beyond ....