QLD Why I bought in Goodna - See Change

Can one well known poster move a suburb? I don't know.
I'd call that the Pied Piper effect.

 

hehe

The PC'ometer becomes the Pied Piper effect !!

 

@See Change
It's been really helpful seeing some of your thinking and methodology through this post. Thank you.

I was wondering if you could comment on some questions: Looking over the last 10 years, i see what you are saying regarding Goodna c.f. Logan. Goodna is still below previous cycle.



If i understand you rightly, i see that you are often trying to time entry into these lower socieoecononic areas, make a prophet and then sell. I am thinking of the next IP i need will be high yield. We have a PPOP on central coast, and a 3 bed town house in Mount Gravatt East (got last year). I am still a novice.

MGE hasn't dipped much over the last 10 years. and from our macro DD, it looks a good place over coming years.

My question is, if i was thinking of buying and holding longer term, would Goodna (or similar type of place) be an good example of something to go for, since if i had bought in 2008, i would not be in a good position after 10 years cf MGE.

What caused this major dip in these lower socioec. places? Was it just floods or other? and in your experience, are these type of places likely to go well in the next 5-10 years period (knowing you don't have a crystal ball)?

 

Apparently houses in these areas were circa $80k in the early 2000's. Does anyone have access to data of the Goodna area going back this far, and also Logan Central for comparison purposes?

The 10 year historical prices posted above seem to suggest Goodna is below where it was 9 years ago so is due for growth.

Looking at past threads on Goodna/Gailes, some people didn't like it due to low socioeconomic and it didn't seem like a "nice place to live". Oh well. Gentrification will take its course if it's cheap.

Some people also didn't like it because it's too far out. But according to Google Maps, it's 20mins from Brisbane CBD and 16mins to Ipswich CBD. It also has a train station. Doesn't seem far to me...

Some people said parts of the area were heavily flood affected which pulled back prices for the whole area, and increased insurances for the area, even parts which weren't affected. What are your insurance premiums like, See Change?

For anyone who lives nearby, how was Goodna/Gailes affected compared to parts of Logan?

Is there much infill development in the area that could compete? Does anyone know what pricing is for surrounding developments that would be competing?

There don't seem to be many run-down/trashed properties compared to the Logan area, so without driving through the area it's not looking all that bad.

My purchases to date have all been below market value (my latest purchase circa 20-25% BMV) and my strategy is usually to purchase BMV or something I can add value to, but I'm thinking of throwing a Goodna/Gailes property in the mix as it seems it might perform pretty well over the short, medium and long-term.

Am I missing anything??

 

On the last property that I bid for prior to starting this thread ( Eric St ) there was 9-10 bidders . We missed out . When we started buying in may last year we were either the only bidder , or maybe 1-2 competitors and I understand most of those were via buyers agents .

Most of the agents up there tend to leave the listings on for a while before they put under contract or take them off line .

Since then I've seen the market gaining consistently gaining strength .

I've been watching Goodna since Last may and any decent properties are selling . The only ones that haven't been are the flood prone ones and those close to power lines , and even those eventually sell , though sometimes I wonder about some peoples due dilligence .

Cliff

 

Had a sober look today .

Reason why I didn't look there was because of the overall yield of the suburb is closer to 5 % compared to Goodna ( which was just over 6 % ) . I was targeting suburbs yielding 6 % or more .

There may well be some good returning properties in Camira but we were looking to buy more than one so I wanted as high a yield as possible as my observation is that the lower end properties often tend to out perform more expensive properties % wise .

Cliff

 

Seal

I definitely am not interested in Prophets , though I'm happy to make a Profit …..

My observation of places similar to Logan , goodna , Mt Druitt and Elizabeth is that they do drop down after each peak . People who buy there don't always make good financial decisions ………( warning , warning ) . Owner occupiers out there loose their job and suddenly can't meet there mortgage and suddenly the bank moves in . They have less financial buffer .

Some of the investors who buy out there , buy out there because it's also the only place they can afford , being on lower incomes, maybe less financially experiences , they also can make bad decisions or loose their job and hey presto the banks move in .

I'm not sure how many people watch the cycle out there , but if I did I wouldn't be buying at the peak or as the market is starting to come down . Maybe I'd wait until I see the market starting to pick up ….

Not living in brisbane at the time , hard to know , but I do recall the GFC also occurred around that time , and in Sydney , even in Blue chip places like Mosman and Manly nice properties fell in value …

No I don't have a crystal ball . I've bought in Goodna with my particular circumstances in mind . My expectation is that Brisbane , in the balance of probabilities , is going to be the next capital city to move up ( Hobart might pip it , but we have a reasonable exposure down in Tassie , and if we buy more there the land tax will start adding up …) . On the balance of properties I think Goodna will do as well as any other option that was available in brisbane that comes close to Cash flow neutral ( which was one of my criteria ) .

I wasn't buying in Brisbane in 2008 . It was booming and had been for several years since we bought there in the early 2000's

Cliff

 

In logan in the early 2000's the most we paid for a property was 78.5 . Also paid 62.5 … In the last cycle , on median values , goodna and logan appeared to have performed similarly .

We didn't see any trashed out properties in goodna ( though I'm sure they're there ) .

I'm not buying in goodna with any expectation it will gentrify . I don't see that happening in my like time , same as I don't expect that in Mt Druitt or Logan . They are non descript lower level suburbs . They're not like Redfern or Newtown of 20 years ago or paddington of 50 years ago ( that used to be a working class area …) which are all close to a CBD .

Only one property we bought had a flood loading , 10 % . The property next door was flood zoned , but was at the bottom of a 20 m embankment .
Around 1 k for insurance give or take a bit . Passed on one which had " never flooded …" but had flood zone to fence line and flat block . Insurance quote on that was 6 K ...

There are some larger blocks 1/2 - 1 acre , but most of the ones I saw were flood prone . There has been some infill development , mainly villa's , duplexes .

Bottom line . Do your due diligence and there are no guarantees ….

I can tell you why I bought in Goodna , but every one else has to make up their own mind .

Cliff

 

Don't think so ….

I think I'm just observing and reporting what's already happening . My observation over the last 15 odd years is that the informed members of the forum are pretty good at seeing what's happening ( and reporting what's happening ) just as it starts happening .

The problem for newbies is knowing who to listen too . Some people have a good track record in certain areas and then start making pronouncements about areas they really don't know that well . Then there's also a vocal minority who know nothing about anything …. and others who are not always truthful in their postings about what they are doing .

Cliff

 

Hi Cliff, we been to a few meets, but yet to actually meet, but am curious with the above and your process, do you research using some data tool first on a suburb to find yield etc, then move on that ?

If yes, do you feel that the data sites are indicating something special about that suburb ? How do you work out if something is skewing the data (such as a lot of new builds).

 

Thanks for all good information Cliff.

How do you compare Darra or Acacia Ridge with Goodna? There are properties with over 600sqm land for ~360K. Just 15Km to Brisbane cbd. I started to look at Goodna after your post, but found that Darra and Acacia Ridge are very competitive. I am just wondering why did you go pass Acacia Ridge all the way down to Goodna?

Thanks again everyone!

 

Cheers for the info, this has been an informative thread, looking at a CG next but then will have a focus on higher yielding property so starting to research different area's now.
I enjoyed reading your strategy in chasing this area.

 

T

Thanks.

Does rpdata or someone else do info for prior to 10 years for CG? i saw you talked about your Logan prices with Jmillar.

I think the thing i am unsure of is, would goodna or similar type of place (was looking at windale in Newcastle - another housing commission area, which has been steadily growing, but as most say is probably near peak or over it), would grow well over 20 years (since logan and goodna have dipped so much in 10 yrs). ie are these usually part of a good buy and hold strategy?

 

Yes . I use realestate.com.au which has a yield map in it's investor section . That and sqm free data section are my initial tools ( Both free ) .

I'm becoming less and less interested in areas that are undergoing development , because that can change the market and potentially lead to an over supply , which may not be obvious when you buy there . It is worthwhile trying to look at an area to see if there are new developments that have twisted the data.

I don't think there is anything special about goodna , except the timing , i.e. it hasn't moved as much as Logan and has low vacancy rates .

Cliff

 

A quick look reveals the properties are more expensive and have lower yields ….

That wasn't what I was looking for

One of the places with the highest Cap growth in Sydney in the last 3-4 years was Mt Druitt which also happened to have around the highest yield 3-4 years ago .

Investors are chasing yields .

I haven't bought in Goodna because of the yield . I've bought there because I'm expecting a high capital growth . Any one who says it's one or the other really doesn't know the market ( only proviso's I'd make is that the high yield has to be well located , i.e. in a capital city or diversified major regional town and at the right time of the cycles )

Though I believe it will get good capital growth because of the yield and it's location ( major city ).

If I wasn't expecting capital growth I wouldn't have bought there at this time .

Cliff

 

I use price finder which goes back around 20 years , which comes free ( for a period ) with a subscription of API magazine .

Cliff

 

ah yes, i used that for last ip purchase. rixter got me onto that. my subscription has currently run out.
also was re-reading my last post to you. I was wondering why you were making referring to the prophet cf profit.

 

No one else in the family who needs their own personalised copies of API ?

Cliff

 

Ok, I see, have looked at that before.

Re Goodna, my understanding is exactly what your doing, Logan and Bris first, then out Ipswich area later, if low vacancy then your set to do well. Do you feel it has started out there as yet ? I am starting to wonder if it is similar to the north of Bris, from Deception bay to Caboolture.

PS with the pricefinder your all talking about, how long after you subscribe to mag do you get access and how does it compare to what you can get from all the open sites out there already ?

 

Access is meant to be for three months , but it seems to stretch to 6 months

Do I think Goodna has started moving ? Yes , I think it has moved between 5-10 % in the low end of the market which s what I've been watching . We bought a NTC 3 bedder for 215 with no competition early on . Wouldn't get that now .

Cliff