QLD Where would you buy in QLD?

Discussion in 'Where to Buy' started by samenglish, 28th Jan, 2019.

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  1. QldKoolies

    QldKoolies Well-Known Member

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    so much melbourne talk...

    for a balanced asset i’d look out everton hills way good OO areas with affordable prices. I like Redcliffe but im suss on it, its low socio economic unless you want to pay top dollar for an IP, the streets on the water are night and day from the burbs behind. Long term maybe like 15-20 years to gentrify.
     
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  2. Luca

    Luca Well-Known Member

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    Arguing is not my intent and everyone has got different opinions, my only point was that on big statements like "Frankston (40km from the city but near the beach) is better than Footscray (6km from the city)" you need to make sure have valid points.

    Ends up Footscray is dominated by units, so? It was also Frankston South and not Frankston. What about Sorrento that has a median of $1.2M? Very close to the water, I guess based on your logic a lot of people living there driving to city (or other workplaces) everyday, only 90km.

    To me in Melbourne proximity to the city is a must and Frankston will never beat suburbs like Footscray, St.Kilda, Prahran, Toorak, Hawthorn, Kew (all same distance to the CBD), or Chadstone, Ashwood, Burwood, Box Hill, Broadmedows (all same distance to the CBD).

    If we say same distance but beach side yes I get your point however beach side is a weaker driver than distance. Distance and proximity to the beach are only two of few drivers making one suburb more desirable than another.
     
  3. Rich2011

    Rich2011 Well-Known Member

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    I agree. Alternatively the OP could look around Rochedale South or Springwood. Lots of potential with these suburbs they have great access to the M1 with a short travel time to both Brisbane CBD and the Gold Coast or Ipswich. Lots of money being spent on infrastructure with the Gateway merge and the extension of the busway to Springwood. 500k will buy a good property in these suburbs.
     
  4. Noobieboy

    Noobieboy Well-Known Member

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    Brisbane is not Melbourne. If something is “working” in Melbs it’s not necessarily transposable to Brisbane. Redcliffe is not Frankston. It’s not a beach, it’s lower socioeconomic area. Keeping shouting about Melbourne doesn’t mean that Brissy will follow.
     
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  5. kierank

    kierank Well-Known Member

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    Unless it is a boom :D.

    If only ...
     
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  6. Noobieboy

    Noobieboy Well-Known Member

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    Brisbane has its own boom ;). To be honest I find transport and roads in Brisbane a million times better than Sydney and Melbs. Can't see why it wouldn't eventually BOOM.
     
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  7. kierank

    kierank Well-Known Member

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    ;)
    2019 would be a good year for it to start :D.

    We would like to sell our PPOR this year but are prepared to wait until the BOOM gets underway ;).
     
  8. Yinka Dare

    Yinka Dare Well-Known Member

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    Until recently Frankston was and in some parts still is a lower socio economic area. Five years ago people would laugh at Frankston, but then something happened strange happened. The council spend a lot of money on it. Even Frankston beach was not considered the best beach back then, the council spent big money on infrastructure. I see a lot of Frankston in Redcliffe. iI know queenlanders think a beach is something with waves, but this is false.

    It’s like you’re upset that you bought in Logan somewhere and regret not buying in Redcliffe/Moreton Bay. While Melbourne is not brisbane, the Australian market in any capital city says that close to the water equals $$$.

    Areas change. Good investors know this. What’s a low socio economic area today, can quickly become a very desired area. My fiancé’s parents bought in Elwood in the 70s and it was considered a ghetto, just sold for 3 million.
     
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  9. gman65

    gman65 Well-Known Member

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    I was in Frankston 12 months ago.. When I lived in Melbourne 20 years ago it was ****. Right now, its only slightly less ****.
     
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  10. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    It's not all about the CBD. This plays a factor but there is no correlation between dwelling price growth and proximity to the CBD as many believe. People tend to base their assumptions on their own experience, "I am willing to pay more closer to the CBD therefore properties will perform better there" but this is folly. Drivers exists independently in every market - look at the mining towns during the boom. Those places aren't anywhere close to CBDs...of course, the drivers have to be sustainable and CBDs do provide this, but it doesn't mean the growth rates are the best.

    As for the Frankston comment, these values are definitely not the same as the inner city values, but have you compared the growth rates over the last 3 years? Frankston's median has grown from $368,000 in 2015 to $620,000 in 2018 - approximately 68%. Footscray's median has gone from $639,000 in 2015 to $900,000 in 2018 - approximately 40%.

    On pure percentages, Frankston has outperformed Footscray. However, you need to take into account total return - what have been the yields? Probably better in Frankston given the prices. But going even further, there are absolute value considerations...even though the percentages are better in Frankston, if you'd have bought a property in Footscray you would have made $261,000 compared to $252,000 in Frankston, (a negligible difference in this example), but often, even though the percentages might look better in one area, the absolute value returns are flipped.

    This is where holding costs and overall strategy comes in. If you can afford to buy 3 properties in a given area because the yields are higher but the growth is slightly less, you will probably come out ahead overall than buying one property in a higher growth area with lower rents. But not everyone wants to do this, which is why personal goals, risk strategy and personal finances come into play. It all depends on your situation.

    I can tell you that I bought a property in Langwarrin (right next to Frankston) in 2015 and it has practically doubled in value in 3 years with a yield of almost 6%. If I'd have bought a property in Footscray it would have cost me a lot more to hold and would not have performed as well. Back to the argument, Frankston has clearly outperformed Footscray in the last few years by almost any metric.

    As I said at the start, proximity to the CBD doesn't always mean better performance.

    - Andrew
     
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  11. Luca

    Luca Well-Known Member

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    Couple of comments but again this is just my point of view:

    - It all depends on the deal, no matter where the market is, if you bought well you`ll do fine, so here we are talking past performance which is just an indication of what the suburb / market can potentially do but it doesn`t mean it will do. Buying closer to the city has been a well proven principle but this doesn`t mean you can pick up a good stock somewhere else.
    - You compared 2015 to 2018, it should be 2012 to 2018, boom cycle in Melbourne. The last 3 years the outer suburbs and regionals outperformed the inner areas in terms of %
    - Boom periods everything pumps, this is shares and crypto too as there is euphoria in the market, no matter what you buy and where you buy (you still have the chance to select the wrong asset anyway :))
    - We are comparing a general principle, even H&L package doubled in 3 years time here in Melbourne and I am guessing the yield will be a lot better than Langwarrin considering no stamp duty on the house and depreciation.
    - If we buy at the bottom and sell at the top than everyone wins doesn`t matter the suburb and price drivers. Totally agree on the mining town but how many did get out at the top and how many got caught? I guess the second group win.
     
  12. Yinka Dare

    Yinka Dare Well-Known Member

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    Time will tell. I don’t expect Brisbane to ‘boom’, but I am expecting annual growth of about 5-7% over the next decade. I don’t think this is unreasonable. The Queensland economy is in the best shape it’s been for a long time, the city has recovered from the floods and a crapload of new infrastrurure going in. The Melb/Sydney prices will also mean many who cannot afford these cities will move/buy in qld. Will this be Redcliffe? Gold Coast? Sunshine Coast? Brisbane? I’m not sure. I do expect all will be fit in some regard
     
  13. Yinka Dare

    Yinka Dare Well-Known Member

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    Clearance rates still 70% in Frankston, council has spent huge money upgrading the train station, beaches, roads in the area. Frankston high school zone also one of the most desired locations for education. While I don’t have any properties in Frankston, I do have one in nearby Seaford. Nice 55% growth in the last 3 years. I’ll take that!!
     
  14. kierank

    kierank Well-Known Member

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  15. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Past performance is never an indication of future performance which is why you need to look at underlying reasons for growth (and future ones), not just those that have been before. And what does "buying well" mean? Just because you picked up a house for a good deal i.e. under the suburb or area median for that type of dwelling doesn't mean it will perform just because you bought well relative to the surrounding dwellings in a given market at any one time.

    Right. That's my point. You can compare 2012 to 2018 or 2002 to 2008. Inner and outer rings and regional centres and anywhere perform differently at different times. The fact that in the last 3 years this area performed better is exactly my point. The savvy and educated investor knows how to choose those areas at the right time and for overall future growth as it's the underlying drivers that matter, not the proximity to the CDB.

    Correct, which is why choosing areas and assets based on solid fundamentals and not following the crowd is what will see your asset perform over the longer term.

    Not all house and land packages doubled as some areas have been severely constricted by over supply of land. And I didn't say yield was the be all and end all, but the IRR needs to be taken into account when measuring the overall performance of the asset, not just the growth. As a side note, stamp duty and depreciation have nothing to do with yield. Gross yield is a blunt instrument and net yield a little better. When working out the post tax cash flow on the property you would take depreciation into account.

    Of course, which is why I said the drivers had to be sustainable. It still illustrates that IF the drivers are there (and at the time no one knows how long they will last), regional centres CAN out perform CBD locations. Just because it didn't last doesn't mean the area didn't see growth. The entire fractional reserve banking system and fiat currency is essentially a ponzi scheme for anyone with any idea of how money is created, so in reality any area could face the same thing at any time. It's just held up by strong pillars....for now.

    - Andrew
     
  16. BB5

    BB5 Well-Known Member

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    I like a visit to Redcliffe every now and again. Nice to sit at the cafes by the jetty or go to the markets on a Sunday.

    However, I never considered buying there because the commute would be awful and it gets distinctly bogan in surrounding areas. Let's face it the beaches aren't a patch on the sunny coast ones either.
     
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  17. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    I love hearing this stuff as people were saying the same thing about Frankston a few years ago! And Redfern in Sydney.... ;)
     
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  18. Closet

    Closet Well-Known Member

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    Lol you are spot on... whilst being close to the CBD is important to some people it isn't to many people as they can't afford to live there...the main thing is having some form of scarcity that attracts families to the areas, signs of gentrication and decent increasing disposable income. If you look at most of the graphs for Melbourne...pretty much everywhere boomed (yes even Melton) and doubled CBD or no CBD....
     
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  19. samenglish

    samenglish New Member

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    Hi everyone,

    Thanks so much for your kind replies and suggestions to help. I have looked at everyones suggestions. Unfortunately, I didn't get approved for as much as I want and could probably only spend up to about $430k.

    I have compiled a list of suburbs. What does everyone think about Narangba or Forest Lake? They are both within some distance of Brisbane CBD (30 and 40 minutes) and they have decent houses in the $350k mark? Other areas include Inala, Bald Hills and Alexandria Hills..although all a touch more.

    I just think If I was to buy this and rent it out, I couldn't see myself losing in the long run? I can't see prices in those locations going down?

    Any advice would be appreciated.
     
  20. QldKoolies

    QldKoolies Well-Known Member

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    32 Crowley Street, Zillmere, Qld 4034

    This is a dump but you get the point, between rail and chermside, near arterials but not on a main road, big corner block, not far from the city. Deals to be done in your price range.
     
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