Strong Growth in Brisbane

[Joe D]

Given you have an old house on 754m2 and require at least 405m2 for each subdivided block, what about showing interest in your neighbours block?

I expect these would be of similar size and condition and at least you could carve 3 new blocks from 2 existing lots. These would still be approximately 25% larger than a 16perch (405m2) lot.

This would only work of course if the purchase cost is essentially (single lot) land value or the house can be relocated.

 

[MJK]

i had a quick look at your block - the good news is you've made a fair bit in capital growth since you bought it.

re development...the block is Res A - which means you won't get a development on there. you could tart up the house etc and do well that way but in the pocket that it's in you will never get units/townhouses unfortunately - so the developers are out unless the whole pocket gets rezoned and i can't see that happening in the short term, but who knows!!

you are correct re the splitting rules - if you are outside a Demo control Precinct the minimum size to split is 809m2 (for BCC anyway). Inside a precinct you need a 900m2 (after the grace period finishes in about 18months or so). In short you won't be able to split either.

Where I think you'll do well, (and I'm not a property speculator or economist) based on previous experience is that once the developments slow down the next thing to happen is urban renewal with local shops and streetscapes getting face lifts etc and standard lots then become attractive as people move into the area - given that you have a large lot and not just a 600m2 is a bonus too. you are near a good shopping centre, the Gateway and heaps of schools, churches and services so you should continue to do well IMHO ;-)


hope this helps some!!

cheers
UC

You are full of good info. Yes this is as I have been advised previously. Thanks.

MJK

 

[MJK]

Given you have an old house on 754m2 and require at least 405m2 for each subdivided block, what about showing interest in your neighbours block?

I expect these would be of similar size and condition and at least you could carve 3 new blocks from 2 existing lots. These would still be approximately 25% larger than a 16perch (405m2) lot.

This would only work of course if the purchase cost is essentially (single lot) land value or the house can be relocated.

Actually I had a contact keeping an eye on next door. Thanks for the tip.

MJK

 

[Sailesh Channan]

We noticed prices massive land shortages a few months ago and big increases in the final values of our completed products. We even have buyers offering more money than the list prices on properties listed at $20k above our last sales prices. This rise has been sudden and taken many by surprise.

One of the reasons for this jump may be that rising rentals may have forced many to purchase. I also believe that many home buyers where waiting for a direction from the market before jumping in and this rise as forced people to act causing a flood of buyers.

As usual investors who where on the prowl have also been buying up due to the increasing yields.

From a development perspective I believe this type of market is the hardest to work in as your conservative numbers start to be way below market expectations. This means more work and greater due diligence.

 

[urban cowboy]

yeah sailesh i agree with you whole heartedly...

the other thing i've seen working nth bris is that there are smaller developers (some of the 3 pack townhouse type guys) that are being spooked by how quickly there stock is selling off the plan and pre-completion and rushing out to buy whatever they can to ensure a backlog of sites that will keep them going for a while...trouble is they are paying way above the true market value of the properties they are purchasing just so they can secure it. I know of one developer (and we love them 'cos they give us a lot of work) that paid at least 60-80k too much for an 809 block.

I think there are two main issues that are going to come out of this for developers - one is that sooner or later the prices of completed products are going to peak - but not necessarily the cost of land - hence margins are going to be a lot tighter and force a lot of the smaller guys out of the game. which i guess leads into your statement about greater DD etc.

The second is that whilst there is big money being forked out for sites - it is perhaps going to push up values in the area due to a lot of these guys paying cash for sites - keeps the bank out of it with lower valuations and when true valuers (and even agents) go in to look at comparable sales for whatever purpose they are going to get inflated readings...not sure if that is good or bad - i guess it depends on which side of the fence your on.


MTK - always here to help!! best thing you could do if you want next door is approach him/her direct and see what they want for it - won't be hard to work out what its worth, there's been a lot of sales out there. That's if you haven't already

cheers

 

[kaf]

I think this recent increase of interest in property is a normal development during a cycle. When I did my research on which Brisbane suburbs to invest in I noticed from the historic price growth that a lot of suburbs have a big bump (the boom), then a quiet period of little growth and then another smaller bump (couple of years of 15%+ growth - and we might be hitting this phase now), then another quiet phase, then the next boom. The drivers are probably different at different times and the overall time scale differs but the pattern was quite noticable over the last 2 cycles.

So just to give the crystal ball a good workout and let's say the boom in Brisbane was 2001-2003, 2004-2006 quiet, 2007/8 little bump, 2009-2011 quiet, 2012-14 next boom (possibly based on baby boomers retiring if B Salt is right but then he usually is): that's a 11 year cycle based on historic performance and not considering the "this time it's all going to be different" point of view. Interesting to hear what other people think.

Cheers

kaf

 

[TOBA]

The rent for my 2BR unit in Carindale went up from $235 p.w. to $285 p.w. This is the first time I experienced the rise of $50 .

 

[tremolo]

Having just bought a house in Wynnum I can also confirm that the place is going bonkers. We looked in the Mt Gravatt area and on one occasion offered list price for a house that’d been on the market for 2hrs. Later that day someone came in and offered $15k more, cash. That seems to be the norm at the moment.

 

[Watermelon Man]

There's great buys around in New Farm where I'm living!!!

 

[WinstonWolfe]

I'll pipe in for Zillmere too. I was sniffing around the LMR precinct around Gillies St in Jan-Feb. Encountered some serious faced investors at a prelisitng inspection. They seemed quite put out with my presence, especially when I went to have a chat with the adjacent neighbours. Tying up 2-3 adjacent 600s in Gillies St would be everyone's game plan.

 

[karina]

I have been looking to buy in brisbane over the last week and can't find anything to buy its all UNDER CONTRACT! (UNDER 300K BAYSIDE)

I called my agents in redland bay and redcliffe today where I currently own property (bought pre-boom) and was amazed to hear that prices on my properties have jumped around 50k each from where they were before Xmas (around 20%). Not only that my agent in redland bay tells me almost anything under 400k is selling within a day even before it hits the internet! Whats going on, can we call this a boom? Whats brought this on?

 

[urban cowboy]

good call WW...

I was talking to one of the developers currently doing 5 nearby to gillies. He was telling me you can still do well in the area if your quick...there was a developer who in the last couple of weeks picked up and 809 LMR block for 320 in one of the best streets...I nearly fell out of my tree when i heard that!!!! wish i saw it first that's for sure!!

all i know is that with all the development going on, i'm going to be a very busy chump over the next 12 months!!

 

[Andrew_A]

I have been looking to buy in brisbane over the last week and can't find anything to buy its all UNDER CONTRACT! (UNDER 300K BAYSIDE)

I called my agents in redland bay and redcliffe today where I currently own property (bought pre-boom) and was amazed to hear that prices on my properties have jumped around 50k each from where they were before Xmas (around 20%). Not only that my agent in redland bay tells me almost anything under 400k is selling within a day even before it hits the internet! Whats going on, can we call this a boom? Whats brought this on?

Beats me.

It's a seriously nice thing to behold though

 

[kissfan]

Not only that my agent in redland bay tells me almost anything under 400k is selling within a day even before it hits the internet! Whats going on, can we call this a boom? Whats brought this on?

Was also recently talking to people in Redland Bay and got told the same thing.

Also good to note that rents have moved higher there as well.

Regards
Marty

 

[kissfan]

I have been looking to buy in brisbane over the last week and can't find anything to buy its all UNDER CONTRACT! (UNDER 300K BAYSIDE)

Meant to mention that was also told that there is now not much selling for under $400K let alone $300K in Redland Bay.

Regards
Marty

 

[Sailesh Channan]

Interesting to see all the feedback coming through on the forum of the different areas showing growth.

It appears that areas that have critical land shortages are showing the most rises. These areas are the north side of Brisbane, Bayside suburbs and anything within a 10 km radius of CBD. As you got out towards Ipswich where there is an abundance of land growth is slow for now.

I would dare say that this pattern would continue into the future as the Government prefers to see future development occuring in the west of Brisbane. This leaves limited supply of land in other parts of Brisbane due to restricted development and we all know what happens when supply is limited.

I am not suggesting that we abondon investing in the west as affordability is also a factor to investors and owner occupiers.

I am sure you can guess from my comments where my investment bias lies. Please note that this is my personal view only...I guess time will tell.

 

[urban cowboy]

I think you're right sailesh...

ever since i joined this industry i had the whole 10km ring thing thumped into me...I think over time that has changed a little big and that may have something to do with the SEQ master plan and the BCC plans for urban renewal and growth around Chermside, Indro and Carindale areas - and similar impacting forces.

IMHO The west is an awesome entry point for inexperienced and long termers...and the big boys tend to play more in the dev markets of inner brisbane because there is far more potential if you do it right and far more risk if you don't know what you are doing...

was speaking to a bloke yesteerday who works for one of the large property marketing firms currently flogging a small house and land estate on the northside...he was saying their next move is going to include bayside development as he believes that anything within 3km of the drink should do well in the next couple of years...

i'll stick to the northside though - it keeps me ticking over nicely!!

 

[Grego]

i'll stick to the northside though - it keeps me ticking over nicely!!
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UC What suburbs would you suggest us out of towners look at?

Greg

 

[WinstonWolfe]

UC, yes, I'd be interested to meet you at some stage.
If you know Nundah through to Chermside Aspley Zillmere, that would be nice.
I am also interested in the satellite commercial hub at North Lakes. I believe that is bound to be bigger than ben hur.

 

[letiha]

The only thing i don't like about North Lakes is the congetion, only one way in and out...thats before you even get on to the Highway and its bumper to bumper all the way to the city. Plus the train station is a 10 minutes drive away in Petrie. Plus the prices out there are a bit much IMHO compared to Bray Park, Warner, Bracken Riadge, carseldine etc.