The word “research” is thrown around willy-nilly in the property investment field. But what do “true” researchers look for when they investigate whether a suburb or region is primed for growth?
I’m not sure what they research, as I have never run into any other buyer’s agents or property companies when I’m buying in an area. After I have finished buying there, I talk to many real estate agents ongoing and they often tell me that buyer’s agents and property companies are buying there now, after all the great deals are gone. Doesn’t make sense to me. Well anyway, it’s about time I tell all!
I think the best way to point this out is through some real life examples on suburbs I have invested in recently. Note: I am not investing here anymore as the suburbs have seen significant recent growth and all the bargains are gone:
The suburbs are located between 25 kilometres and 35 kilometres north of Brisbane CBD.
I was investing in these suburbs between March 2014 and February 2016. Now as you know, I hold my cards very close to my chest in relation to where I invest. I only disclose where I was investing for myself and my clients after I have stopped buying there. Competition from other buyers only comes when I cease to invest in any location. The buyer competition means we cannot secure bargains anymore; and I won’t compete for a house. It simply doesn’t make sense to pay more for a house to simply secure it.
My initial interest in the above areas was due to a poor performing property market in that region for many years. The GFC started this downfall but another kick in the teeth came in January 2011 with the Brisbane floods. That’s not to say that this region experienced flooding, but consumer confidence went out the window for all of Brisbane when the floods occurred, along with the years to follow.
Combining that with house prices under the $400,000 mark in a capital city, meant that these suburbs made my four main criteria:
- Houses, not units, nor townhouses nor subdivided blocks
- Poor performing region, significantly reduced prices since last boom meaning zero competition
- Ability to secure under $400,000 ($390,000 actually)
- Capital city suburbia or large regional
Notice how I haven’t mentioned one single infrastructure project going on, yet I have made the decision to visit these suburbs and spend time on the ground. Even with the best infrastructure projects in motion, the property market can still be dead. And Kallangur is a prime example of this. The infrastructure projects listed below have been approved and in motion for years, yet the property market was dead? Now don’t worry, we will go through these but honestly, they faired very little in my decision-making process to invest there.
Gut feel is my last main criteria for making a decision on whether this location is worthy of my money or not. I have walked away from many locations due to gut feel. Places like Whyalla, Midland WA and Elizabeth SA and more recently Logan (Logan Shire) Qld.
Inspecting houses on the ground allows me to work out what type of property we should be buying. And it varies a little between each suburb. In Lawnton, Petrie and parts of Kallangur there were some great older, three bedroom houses that offered opportunities to value add through low cost renovation. In Narangba, Griffin and Dakabin, I only purchased four-bedroom, two-bathroom houses with double garages that were 8-12 years old. Kallangur had some of these houses too as there is an old section plus a new section to the suburb. Murrumba Downs were more three-bedroom, two-bathroom houses built in the early 2000’s.
So, let’s get to the infrastructure part and talk about what’s going on in the area.
Employment: All these suburbs, with the exception of Griffin, are located on the western side of the M1 Bruce Highway. On the eastern side is a suburb called North Lakes. Following the highway north on the eastern side is the North Lakes Business Park. This sits right next door to North Lakes Westfield. Once complete, the North Lakes Business Park will employ over 13,000 people (excluding Westfields). The likes of Ikea, Costco and Bunnings sit next door to car yards and many other large retail outlets that are already open. Westfield itself is undergoing a $220 million upgrade, allowing the suburbs on the western side of the M1 to gain access to this area as there was only one over pass. Now, there are three major overpasses making it very easy for all suburbs to get across.
To the north, and only 15 minutes away, is Caboolture. The drive in on Morayfield Rd, which is kilometres long, is filled both sides with retail and commercial businesses. The short drive north makes this very accessible for many employees.
The same occurs on the southern side in Strathpine, which again is only a 6 minute drive from Kallangur.
Currently under construction is Petrie University, due for completion in 2020 and employing 2,800 people ongoing.
One of Brisbane’s biggest employers is Brisbane Airport (BAC). Currently employing 20,500 people, the airport has major expansion programs in place, resulting in employment of over 50,000 people by 2029 – that’s only 12 years away. Given it’s only a 20-minute drive from Kallangur to the airport, this means many employees will be living in this region.
And let’s not forget Brisbane CBD, being a 35-minute drive from Kallangur, making it very accessible for employees.
Transport: With so much going on in and around this region, it’s no wonder the population growth is around 2.5%. That many people moving to a region can put a lot of pressure on the transport system very quickly. And I’ve always said, train lines and highway expansions are only built when congestion becomes a problem. They don’t build a highway to nowhere and hope everybody moves out there, they wait until everybody is pulling their hair out in frustration, then they expand the highways by one lane each way etc. Well, that’s what’s happened here.
The M1 has been going through many stages of expansions from the airport right through to Caboolture. These expansions are still continuing but the highway is much better than previous years.
For those working in Brisbane CBD, the existing train line works a treat with stations at Narangba, Dakabin, Petrie and Lawnton. But for those Kallangur property owners, the new line from Petrie to Kippa Ring opened early October 2016. This will make things easier for the Kallangur residents to work in Brisbane.
Education: Throughout the region there are many public primary and high schools.
One of the private schools in North Lakes is the Lakes College, which made it in to the top 50 schools for Qld in NAPLAN results. Another private school is in Dakabin, the Northpine Christian College. These are both schools from Prep through to Year 12.
For younger students, the Caboolture Montessori School offers private schooling for kids from three years old to 12 years old.
Now, for university education, Petrie University is currently under construction. The local council purchased the Old Paper Mill for $50 million and the University is due to take on its first 10,000 students in 2020.
With so much going on, why not invest in new houses in North Lakes, Deception Bay and Mango Hill?
Simply because the blocks are tiny. Many are built on 250-380 square metres. With four-bedroom, two-bathroom, single garage houses that left no room for any yard. Most were built with 9-foot ceilings so that you felt the sense of space, but as the roof tops were so close together it blocked any sun light filtering into the house. As a result, almost every house I inspected there, was very dark and had a mildew smell. And with tiny blocks and single garages, the streets were full of cars. Not appealing at all. Now, Mango Hill has a separate issue, flooding. I honestly don’t know how some of the new developments are being approved here because flooding is not an ‘if’, but a ‘when’. The lower part of Griffin also falls into this category.
But to re-iterate my point on infrastructure, it’s not the only driver of a property market. All of the above infrastructure projects were approved and underway when the property market was dead. Not even the volume of projects with all those benefits to investors and home buyers, made an ounce of difference to consumer confidence in the dead part of the property cycle. Sure, they are a great selling point now for many buyer’s agents and house and land package companies, but by investing there now, they have all missed the boat.
To secure volumes of properties in any area, real estate agent relationships are paramount. And this location was no exception. Although I had many agents keeping me in the loop, there were two relationships I had in this area that meant that the public and other investors never stood a chance in getting the best houses in the area. As an example, one of my key agents there worked for a house and land package company before the GFC, selling H&L packages to hundreds of interstate investors. When the GFC struck and the investors disappeared, he changed his job and became a real estate agent. This worked fantastically for me as he was contacting these same investors and telling them he had a buyer’s agent looking to buy similar houses to what they owned and we were willing to pay a certain figure for their house, then asking ‘would you like to sell’? As many paid way too much for these houses in the peak, along with giant hidden kickbacks to property companies when they were sold, they were now willing to sell at a huge loss, to simply get that bad investment out of their life. Their mistake wasn’t investing in the wrong location; it was simply wrong market timing.
So this meant we were buying under market value and buying lots of houses that never made the market. Allowing us to see significant growth even though the stats show less.
Let me explain:
These H&L packages were being sold for around the $440,000 mark 8-12 years ago. I was buying them for between $365,000 – $385,000. That’s 20 per cent less than what they paid all those years ago! These houses are now selling for $430,000+
If you read the latest CoreLogic suburb July growth stats you will see:
Three year growth – 7.26 per cent
Three year growth – 13.72 per cent
Yet we have achieved growth of 15 per cent in a little over one year, not three. And the good times have only just started. The next two years will see double digit growth each year, taking these houses to the $500,000 mark in value.
Research is knowing where to invest along with when, but you also need to know what to avoid. Without going into specifics, there are a few no-go neighbourhoods in this area. Avoid high sets as they are too much maintenance, unless you live nearby and can do the renovations easily yourself. Townhouses are definitely to be avoided at all costs as there are way too many being built and will sit vacant without a tenant for some time. And lastly, Griffin should be only for those investors who know the suburb very well. Given the much higher risk of flooding, it’s probably best to avoid completely.
Another positive to the area is the ever increasing family wealth moving into the region. This is simply the suburbs closer to the city moving outwards due to affordability. We’ve seen this in Sydney and Melbourne and this is already underway in Brisbane. Higher family incomes means rents are able to increase along with house prices. And that’s exactly what we are after.
The past six months have seen an immense amount of available houses to buy, where real estate agents are fighting for every listing and buyers are ready in droves. As a result, vendors are pushing the boundaries with increasing list prices of their properties and buyers already are, and will continue to, keep paying higher and higher prices.
Originally Published: http://www.smartpropertyinvestment.com.au/
Top 68 suburbs for growth in Queensland revealed
Top 68 suburbs for growth in Queensland revealed. New data has shown the top 68 suburbs in Queensland for capital growth over the last 12 months to June, with the number one spot reaching triple digits.
Top 68 suburbs for growth in Queensland revealed
Outlined in the Real Estate Institute of Queensland’s Queensland Market Monitor report, REIQ CEO Antonia Mercorella said despite the ‘doom and gloom’ of the property market, there are still locations that are seeing large gains in profitability.
“A total of 68 suburbs throughout Queensland have delivered double-digit growth over 12 months, which is a really strong result,” Ms Mercorella said.
“And there are many more suburbs delivering strong single-digit growth. It’s a great market to be in at the moment.”
While south-east Queensland saw a lot of attention, there were some high growth suburbs found in central and northern Queensland.
The area with the strongest growth was Blackwater, which saw a rise of 151 per cent growth, which Ms Mercorella attributed to the resurgence of coal prices.
Aside from Blackwater, 10 other suburbs saw growth over 20 percent. These included:
- Spring Mountain with growth of 103.6 per cent;
- Collinsville with growth of 46.2 per cent;
- Minyama with growth of 45.8 per cent;
- with growth of 32.9 per cent;
- Hollywell with growth of 30.5 per cent;
- Miles with growth of 23.5 per cent;
- Mount Coolum with growth of 21.9 per cent;
- Dundowran beach with growth of 21.5 per cent;
- Boonah with growth of 21.3 per cent; and
- Idalia with growth of 21.3 per cent.
Ms Mercorella said the top 11 suburbs were indicative of steady growth across the state, but warned against calling it a ‘boom’.
“While we’re definitely seeing prices come back in western Queensland mining towns, such as Blackwater, these prices are still below their peak,” she said.
It’s unlikely we’ll see a return to pre-2013 prices in those areas anytime soon.”
While the top 11 suburbs show a spread of high growth suburbs through the state, 41 suburbs out of the 68 are located in the ever-popular south east corner of Queensland.
Of these, 15 suburbs were located in theCoast region, with the highest growing being Minyama, which ranked fourth overall.
The Brisbane region also saw a large number of high performing suburbs at 13. Hamilton was the region’s best performer and fifth overall.
Next was Ipswich with six suburbs, then the Gold Coast with four, Moreton Bay with three, while Redland and Logan suburbs did not rank.
Outside of south east Queensland, 27 regional suburbs ranked on the list, with the Townsville region recording four suburbs. Its highest performer was Idalia, which ranked 11th overall.
Next were the Cairns and Gympie regions, both recording three suburbs each. Cairns’ top performer was Palm Cove, which ranked 26th overall, while Cooloola Cove was Gympie’s top performer, which ranked 42nd overall.
While only recording one suburb, the Whitsunday region’s Collinsville ranked third overall.
The Bundaberg and Toowoomba regions both recorded two top suburbs, while the Banana, Charters Towers, Fraser Coast, Gladstone, Isaac, Livingstone, Mackay, Rocky, Scenic Rim, Somerset and Western Downs regions all had one top suburb each
The top 68 suburbs which experienced double digit growth over the last year to June 2018, according to the REIQ, are:
|Rank||Suburb||Median price||Capital growth over 12 months (as a percentage)|
|27||Charters Towers City||$142,500||14.0%|
First home buyers, investors in Queensland cashing in on spring selling season
THE number of homes for sale in some of Queensland’s entry-level markets has surged this spring selling season, as first home buyers and investors emerge from hibernation to hunt for bargains.
Local real estate agents are reporting a 50 per cent jump in the number of homes hitting the market in the outer northern suburbs of Burpengary, Morayfield and North Lakes since the start of August.
And new figures from property research firm, CoreLogic, reveal new listings are up 11.9 per cent in Brisbane over the month and 2.8 per cent higher than they were during spring selling season this time last year.
Unit listings have skyrocketed nearly 90 per cent in Fairfield and almost 60 per cent in Strathpine in the past 12 months, while there are at least 30 per cent more houses on the market in Middle Park than there were a year ago.
Raine & Horne Queensland general manager Steve Worrad said there was strong demand for housing in the state’s entry-level markets, driven by first home buyers and investors, who were being lured by their affordability compared with Sydney and Melbourne.
Reserve Bank of Australia data reveals the proportion of first-home owners loans has risen to 18.5 per cent this year from a low of 12.9 per cent two years ago.
Figures from home builder Porter Davis and realestate.com.au reveal that 46 per cent of would-be buyers in the Queensland market are currently looking to purchase their first home.
Raine & Horne Burpengary, North Lakes and Morayfield principal Gina Wells said entry-level four-bedroom properties in Burpengary were selling for $420,000, while homes in North Lakes started from $550,000.In Morayfield, entry-level properties were available from $330,000.
“First home buyers prefer suburbs such as Burpengary and North Lakes as they are only 40 minutes by rail or road from the Brisbane CBD, coupled with the region’s affordability.”
Ms Wells said investors made up about 30 per cent of buyers in the entry-level markets because they appreciated the region’s affordability, infrastructure and historically low vacancy rates.
“We’ve had an excellent September, and we expect the property markets in this region to motor along well into December thanks to a decent level of homes for sale and consistent buyer numbers, which include plenty of Sydney investors chasing the strong yields this region offers,” she said.
Nicole Taylor, 21, and her partner, Billy Mawson-Perini, 20, have just bought their first home in Burpengary — a four-bedroom, two-bathroom house on a 663 sqm block of land.
“We started looking around Rothwell and North Lakes and actually left Burpengary to the last minute, but when we saw this place, we loved it straight away,” Miss Taylor said.
“It’s got more land and the area’s nice. It’s good for a first home.”
Stan Egawa from Place – Sunnybank said those suburbs were attracting buyers in the $600,000 to $700,000 price range.
“There is good interest compared to some of the surrounding suburbs,” Mr Egawa said.
“We’re getting double digit buyers through open homes (in Mount Gravatt East and Holland Park), which is very strong.
“In Sunnybank, we’re only getting one or two people to an open home.”
Mr Egawa said many first home buyers were looking for a home they could move in to straight away and live in comfortably, but with potential to renovate the kitchen and bathroom down the track.
“Three-bedroom, one-bathroom houses are very popular,” he said.
“Their ideal location is Coorparoo or Greenslopes, however, they’re realising that for the amount of money they’ll be paying in that area, they’re going to end up with a lot older house or compromising on block size.”
Rob Karaka of All Properties Group said first home buyers were active at the moment in the suburb of Regents Park, with near new or new four-bedroom, two-bathroom houses on 600 sqm blocks were selling for between $400,000 and $550,000.
Shaji Rajan has just bought his first home in Regents Park after renting for three-and-a-half years.
For just $430,000, he was able to secure a five-bedroom, two-bathroom house on a 600 sqm block at 34 Lamberth Road.
But he had competition, with his offer only accepted after another offer fell through.
“Regents Park is a very good area and it’s affordable,” Mr Rajan said.
“For our budget, we can find very good houses here and good schools and it’s very easy for us to get to work.”
Algester and Calamvale on the southside are also attracting strong interest.
Andrea Manson of Belle Property – Calamvale said listings had jumped “substantially” this spring and first home buyers were keen to get in to the market before interest rates went up. “There’s that perception it’s going to happen sooner rather than later and so many (first home buyers) are wanting to lock in a lower rate while they can,” Ms Manson said.
“Anything under $500,000 in our area is very popular with first home buyers.”
Agents in regional parts of the state are also reporting a strong start to the spring selling season.
Home sales in Bundaberg are 5 per cent stronger than they were this time last year, according to Raine & Horne Bundaberg principal Joshua Rub.
“Values remain consistent despite the spike in sales and those properties that are priced, presented and marketed professionally are selling within 3.5 weeks,” Mr Rub said.
“Sales are higher this spring simply because we have more committed buyers than tyre-kickers.”
He noted the sale to a first homebuyer of a three-bedroom house close to the beach at 25 Heritage Drive, Bargara, for $272,000 within two weeks of hitting the market.
“In Bundaberg and Bargara, local first home buyers and investors are extremely active this spring,” Mr Rub said.
In Gladstone, which had been hit hard by the mining boom hangover, home sales are at their strongest point in four years, according to Raine & Horne Gladstone principal Mark Patton.
“Well-priced entry-level properties valued upwards of $140,000 offer excellent value and incredibly competitive yields that are as high as 7.5 per cent,” Mr Patton said.
“The savvy buyers have recognised the Gladstone market has reached the bottom and they are making their presence felt at open homes.
“Many have also realised that by buying now, they’ll have a good opportunity to share in some capital growth too.”
FIRST HOMEBUYER HOTSPOTS THIS SPRING SELLING SEASON
Suburb Median house price
North Lakes $492,000
Suburb Median house price
Mount Gravatt East $657,000
Holland Park $710,000
Regents Park $410,000
Town Median house price
(Source: CoreLogic, Raine & Horne, Place Estate Agents, All Properties Group, Belle Property)
Originally published as Where Qld first home buyers are looking this spring
Renewed hopes of saving North Lakes Golf Club
Residents living around the financially troubled North Lakes Golf Club are increasingly hopeful it can be saved from being turned into a retirement community.
The course has been bought by developer Village Retirement Group and is due to close at the end of 2019 although a DA is yet to be submitted.
The Save North Lakes Golf Club group met with Moreton Bay Regional Mayor Allan Sutherland this week and spokesman Andrew Cathcart tells Mark he is confident local will get a fair hearing.
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