What’s driving the market at the moment?
At this stage there are several factors affecting each of the big three east coast markets currently.
Melbourne: Melbourne is in a bit of a fluctuating period from the data we see. There is a large amount of supply both in approval and construction phases all the way from Docklands to Werribee. The next three to five years are going to be very suburb specific for growth. Pure Property Investment (PPI) is still looking for established property under the $400,000 market in the north and south-west within 25 kilometres of the city.
Sydney: Similar story, still a large undersupply issue in certain pockets of the greater metropolitan areas and the demand looks set to continue into the next decade. Affordability and wage growth are the major limiting factors we see in general. We do see some value in the established pockets of the middle ring (20 kilometres from the city), however cash flow is not attractive at this stage. We see more value coming to hand in the next three to five years.
Brisbane: Our data suggests that Brisbane will continue to show a nice period of sustained growth into 2020. Its limiting factor in the past has been state government commitment to large-scale infrastructure projects, however, we are starting to see some stronger and more stable jobs figures and in the pockets of Ipswich, Lower Logan/Beenleigh and Moreton Bay. We see (and have seen for the past 24 months) some excellent opportunities to pick up properties around the $300,000 mark in areas which are seeing large scale gentrification and great yields.
Hobart: The east coast’s sleepy cousin is stirring a little and there are some good signs in the short-to-medium term for jobs growth. With the rise of the tourism dollar (specifically China) there is a very tight vacancy rate and demand is building. I see a good couple of years with good cash flow opportunities up to the year 2020.
Adelaide: PPI are a bit bearish in the next two to three years, with some of the large scale manufacturing plants closing over the short term. The announcement of the $50 billion submarine project will provide a great boost with an additional 3,000 or so high paying jobs flowing from this. However this project has a 15-year horizon and as such we don’t see the benefits coming in until around 2019 to 2022.
Perth: Well, it’s a bit of a tale of ‘if you can’t say anything nice, don’t say anything at all’. Perth has some very depressed markets which are getting more depressed by the day. The only saving grace for Perth property investors at this stage are the historically low interest rates. They are not showing any real sign of transitioning their economy from iron ore and gas to mainstream economic drivers. If the state federal government can’t drive jobs growth in the next one to two years before the interests rates start to rise, I do see a blood bath in the short term as investors will not be able to hold their investments once interest rates start to rise. However, the savvy investor will most certainly keep a distinct eye on this market and if we see a turnaround in the days on market, jobs growth and buyer sentiment there will be some distinct bargains to be had.
Darwin: Similar to Perth, we see some distinct challenges in jobs growth and economic diversification. If the new gas project gets off the ground we may see some prolonged price stability, however PPI are bearish on Darwin at this stage.
Canberra: The little engine that could, Canberra continues to deliver investors a solid and stable return. With the Q4 2015/2016 data showing Canberra has delivered the country’s best growth (at over 3 per cent) for the quarter, a stable government and jobs market will continue to provide a safe return for investors. Cash flow is a little slim and entry point is a bit higher (around the $450,000 to $550,000 mark).
So what’s the cash flow situation in general for each state?
Melbourne: Supply on the market and coming to the market is looking very high, and we believe this is going to depress yields for the next three to five years.
Sydney: The more tightly held (non-developable) areas have seen a slightly higher yield albeit a small bump. Sydney is expensive and that is still keeping many Generation Y’s in the rental market as they can’t afford to enter the home buyers/investor market. However the data suggests yields are around the 3 to 4 per cent depending on the area and we don’t see that changing. Creative investors are always looking to add cash flow (granny flats, share accommodation, developing blocks, etc).
Brisbane: One of the better cash flow markets across the country with strong yields and good demand. Stick to the growing areas of Ipswich, Beenleigh/Logan, Moreton Bay where we are buying 6 per cent plus yielding (sub 15-year-old) properties in growth areas. Be sure to understand the vacancy rates and unemployment situations however as they can prove to be very important in these markets.
Hobart: Very tight supply (sub 2 per cent) which is providing great return for cash flow investors. Stick to the middle/outer suburbs (10 to 25 kilometres from city). We are picking up properties which are providing 7 to 8 per cent yields regularly.
Adelaide: Stick to the middle/inner rings. Cash-flow is okay in Adelaide at the moment, and we see that continuing into the next two to three years. Though 5 per cent gross yields are readily achievable, I would steer clear of the outer rings until we see the true fallout of the manufacturing sector.
Perth and Darwin: Cash-flow is okay, but the big caveat is the demand factor. On paper, the properties are achieving 5 per cent gross but the vacancy rates are increasing by the day and this will be a big issue in the long run.
Canberra: With low vacancy rates within the 15 kilometre ring of our capital we see an even keel return of around the 4 to 4.5 per cent gross mark. This is not lighting anyone’s socks on fire, however it’s pretty consistent and looks to remain that way.
So which regions have the most potential for capital growth under $450,000? Which regions have limited potential?
Brisbane: Still our number one pick at the moment, specifically out towards Ipswich, Lower Logan suburbs and Moreton Bay. Price point is still extremely affordable, yields are excellent and demand/jobs creation is building.
Perth and Darwin: In the short term we don’t see any data that is going to help its situation. Perth has seen a doubling of the properties on the market between 2014 and 2016 and they have a long way to go to show signs of growth. It is relatively cheap buying in Perth at the moment but you need to pick the start of the next growth cycle and not just the bottom to ensure you are achieving capital growth.
So that’s our around the grounds for financial year 2016/2017. As you can see, its most certainly not a ‘one market’ approach and where you invest will most certainly dictate your returns in the lucky county.
Original article published at www.smartpropertyinvestment.com.au by Paul Glossop
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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