QLD Yarrabilba (???)

My brother is about to jump into a 3/2/1 buy direct from a builder in Yarrabilba.

Price is $300k, fixed, turn key style. 280m2 (I think, might be this or slightly less - not more).

Comparable properties seem to sell maybe 350-360k for those completed, or via the spruikers

He is a low/middle income earner. He works hard. He is very good with his hands, building things, landscaping and generally improving properties. He has limited this to his PPORs thus far, giving him equity along the way.

I've tried to point out the following concerns to him, or the issues that I would need to reconcile before buying there

CONS
- It's 50km from the Brisbane CBD, 20km south of Logan Central and 65km to Surfers Paradise
- Who is going to live there and why?
- Where are they going to work? Where is the industry?
- Perhaps an initial equity gain, but will be limited by ongoing supply for the next 20-30years (is the plan), with comparable limits to rent
- Tiny blocks, close together
- High investor interest (I'm guessing)
- Complete inability to add value in anyway
- Stamp duty + any selling costs will eat up most of any profit
- No major transport links (its 15-20mins to any major road as far as I can see)

PROS
- Its 300k. Unlikely to lose too much, and there probably is a quick equity gain based on comparable properties.


Unless I can offer him a reasonable alternative, he has already made his decision (and this is his budget). We had briefly talked about a renovator project where he puts his skills and labour to use, but he hasn't really looked at this option. Nevertheless I don't want him to make a mistake that's going to hold him back.

I'd be grateful for any thoughts

 

Hi Bran,

You are being a good big brother. Parking his money elsewhere is a reasonable alternative. I think if you present him with facts, that may hopefully sway him.

There does not seem like a lot of data on PF on Yarrabilba (4207).




Good luck!

 

No, there isn't much at all.
I've sent him a link to a property for the same money that he should consider instead

 

Here's some spiel:

The South East's Newest Business Address

Located between Brisbane and the Gold Coast, Yarrabilba is the south east’s newest business address.

• Yarrabilba itself will be home to over 45,000 people
• It is located in the geographical centre of a growth corridor with a projected population of 450,000* people
• Offers a wide variety of options for Retail, Commercial and Industry uses Source: *ABS 3218.0 (for 2006 ERP) and 2011 edition Queensland Government population projections. Projections produced by the OESR - Queensland Treasury.

Yarrabilba is forecast to provide:

• Over 13,000 jobs onsite at Yarrabilba upon completion (estimated)
• Approximately 1,250 construction related jobs created per annum over the 30 years of development
• 100+ Ha Industry and Business area (supporting a range of service and light industry uses)
• Town Centre catering for up to 80,000 sqm of retail floor space
• District and neighbourhood centres
• Total of 11 public and private schools planned

 

Tell him to ignore the advertising! Its just a marketing spiel to part his money from him.

Better to invest closer to the city... its not even near the main road to the Gold Coast and there's land surrounding it everywhere. You're right, it could take 30 years for that surrounding land to in fill. Its just too far out at the time being.
Good luck...

 

Pros:
Industrial lots being developed at Yatala / Coomera corridor

Plenty of construction work in the area I should think

Child care / education opportunities always available in the 'Nappy Belt'

Cons:
Car reliant
Tiny block

 

A lot of those people travel into Logan/Ipswich and the inner city to work, in peak hour around Loganlea and Waterford West is a real traffic jam which is the main thoroughfare they come through.... (Oh, and a fair few probably collect centrelink so don't have to travel anywhere!)
I would rather buy something in Logan, try for under market value and have him renovate and add value that way, go for a decent block of land. For approx 300k (or even less for a house) you can get into Woodrige, Slacks creek, Kingston, Loganlea etc. Then your close to all the major shopping centres and the motorways and train line.

PROS
- Its 300k. Unlikely to lose too much, and there probably is a quick equity gain based on comparable properties.

Not sure I would be happy with 'unlikely to lose much' I would prefer to invest in 'likely to gain value!'

Tell him to put in the hard yards to find a better property which is under market value and has the potential for an equity gain via renovation or future development (granny flat, duplex, subdivide etc).

Yarrabilba Property Market, House Prices & Suburb Profile
Low demand market.

 

Thanks for your ongoing input guys. I'm going to direct him to this thread, so if anyone else cares to comment to him he might be grateful.

 

Where does your brother work and how much will it cost him to commute, purchasing all supplies on his way home.

Didn't we have this same conversation last year?

 

Not sure.

This isn't his PPOR. He refutes my arguments with the claim that this is 'purely an investment property', and 'purely a rental'.
I've indicated that in his position he needs another way to add value, as buying it is purely a strategy based on hope - one in my opinion is flawed, particularly in his position where is serviceability is going be be a critical constraint.

 

Sorry, I interpreted the above as this purchase being for his PPOR. Has he ever driven through this prime piece of soil? I think you used to live nearby in your family home. Where does Park Ridge end and Yarrabilba commence.

 

Good news (I bloody hope!). I've talked a lot to him about various options, but mostly about gaining an education on this stuff and started to poke him with some ideas bigger than 'buy an IP', or buy '2-3'. The old goal stuff. But also to dedicate himself to some books, ss and pc for a while.

He's read some interviews so far, and I've assured him I can put him on literally the same table as some of the inspirers.

 

Brother inlaw purchased a property off the plan in Yarrabilba. Been a couple of weeks and is still waiting for a tennant.

 

Friend of mine built PPOR out there. And by out there I mean way, way out there. From my place on the Northside it was a 150km round trip.

It is surrounded by land. In the 20 minute drive from the SE freeway you drive through pasture land.

From his perspective the land was $200k so it was an affordability thing. He wanted a new house, that is where he could get a plot in his price range. The house is nice, but what always bothers me estates like that is they make the streets so narrow. You cannot park on the street, and when there is already a car on the driveway, you are forced onto the grass. Result, it makes for a less attractive neighbourhood.

As an aside, his son bought a car last Friday. It was stolen from the drive on the Saturday night...while they were home.

Now, onto the investment questions.

- Close to transport? No.
- Close to schools? No, but being built.
- Close to employment? Not remotely if your employment is in Brisbane or on the GC.
- Owner occupier appeal? Only if you want new, and only while they are new.
- Differentiation? Nope, all the same.
- Neighbourhood demographic? Work on progress, however the car story above may or may not be indicative.

Summary, from an investment perspective, there are likely many signifantly better places.

 

Have a friend that built down there, wouldn't myself as too far away.

 

Good that he's not being stubborn.
It's way too far out. The land is way too small.
He should by established while he can (NG could change in the future, buy new then).
Plenty of places around that price range with less risk - and more land value.

 

After you have given your opinion, if it is wanted, then is up to them, if you somehow manage to change the mind, and it does not perform, or goes bad, or the original area does much better, you will probably hear about it for a long time.

I had a family member asking about where to buy a place, about the only thing I advised against was buying in Sydney in general & stay away from OTP units in the areas that will be saturated. A week later, they said they had gone with an OTP unit in Sydney.....what a waste of time, especially seeing they were looking outside of Sydney and at houses they said initially, maybe they think I was hiding a sure thing....lol......anyway, I am off the hook no matter what happens

 

Haha. Well there you go.
Should have told them to avoid a house in Brisbane at all costs.

 

Not really something that concerns me, would not like to speak with anyone who will take everything you say as something they should do, also better if Bris grows due to a lot of home owners

 

I bought one last Nov. the property settled on a friday and I got the property rented the following Wed and tenants moved in on that day too. Nice tenants ever since paid rent on time....
I guess it depends on who is managing your property there.