QLD Southside House or Inner Apartment?

[gfresh]

I am still considering buying this year, despite the various doom and gloom, of which I still believe in :) Although still keeping an eye out cautiously in case things rapidly deteriorate.

If this isn't the right time to buy, then there probably never will be, yada.

Anyhow, at the moment my thoughts have narrowed into opportunities that weren't there even 3 months ago. Torn between the two options...

Option 1 3br free-standing house in Rochedale South, Underwood, Runcorn area for approximately $350k. I am a bit familiar with Runcorn, having a friend that lives there. Is a 15/20 minute trip to the city, not too scummy, shops around, buses available to city (QLD is more buses than trains, but we have a train network too).

My main thoughts with this, I think there is greater risk attached being outer, but at the moment, it's at least affordable, and I can always return to live there for many years as it will have space, garages for cars I work on, etc. I have a "base" another words, even if I move elsewhere.

A few are situated on 600m2, up to 750m2 blocks which have potential.. Longer term plan would be in 10 years to subdivide and build townhouses or the like. These areas are starting to offer more and more of those sorts of living.

At the moment, I am thinking the increasing rarity factor with house+land will help. Being 20km out of the city, I am unsure whether the "house" factor, overpowers the attraction of "inner city" ???


Option 2. Two bedroom apartment approximately 5km from the city for around $300-$350. More than likely would be in a block of 6 or so. Some of these areas seem to be rental ghettos in some ways, but of course, are inner city, close to everything.

I will have 20% deposit for first property and approximately $80k spare after that. Plan is for PPOR for 12 months, beyond that probably moving out, renting, and purchasing another entry-level property if things look like they are improving globally. If not the stay in the PPOR may be longer.

Rent range at the moment for the two options is approximately the same, $300-350/wk

Comments, thoughts from experienced investors?

[kincella]

gfresh....you have 6-9 months to watch property, I dont know Qld, but all I would suggest is you spend time really looking at the area, taking notice of everything, the neighburhood etc....
where is the work, biggest employers , industry etc...what is the population...is it dependent on mining, or construction, or financial services..
I mean really do your homework.....in all suburbs there are good pockets and bad pockets...and you have to compare apples with apples...
QLD and WA went way over the top in prices...on average 100,000 more than SYD and Melb....to the 400k mark...so I think it will have to come back
more in line with Melb and Syd prices

and for instance in Melb...new freeways mean travel time is now 30 mins to the cbd, and you can buy houses on the outskirts for around 250,000...
we have buses, but most travel is by train or car.....
I believe there are some very affordable properties out there now....Melb,
but I dont know Qld...and would think it would have to come down...specially since the mining is frozen....but resources will come back and play a big role...
I think you can do better than the 350k's....
the other thing that is happening....people are buying one bedrooms, its a whole lot cheaper, and since they do not use the spare room...they save thousands...
buy a property, but do not see it as your lifetime prop...use it as a step by step approach.....buy well for the first prop, later sell and upgrade, and so on...repeating.....
interest rates coming down...fix it, but only for the time you expect to hold that prop, say 3 years, max 5 years only...or 10 years if you believe you will hold it for 10 years...
terrific opportunity this year.....but expect to put a lot of time into it...
go to as many open houses, both for sale and rent...to see whats really going on...and look around the neighbours at the same time
cheers

[gfresh]

Hi Kincella,

Thanks for the advice.

Waiting a little to attend OFI's, as to not get on the nerve of agents too much as a window shopper, but will get onto the ground in a couple of months.

I'm surprised a little your thoughts seem to align a little with mine on QLD.. I have been holding off for about 18 months now because somethings just didn't seem to "match" with me, with regards to income (from those I know) and the prices compared to parts of Sydney & Melbourne.

There just doesn't seem to be that bracket under $250k which is available in nearly all the other states for at least something. I know in the last 5 years a lot of older folk have moved up from Sydney, which may have helped push values up a bit up here, and there is a lot more "lifestyle" properties rather than the basics.

It's interesting that while QLD is of course considered a "resource" state, in the brisbane and goldcoast areas I don't know anybody who is employed, or has any connection to mining. Much of that is up north, well outside the city areas. Hard to tell how powerful the economic flow-on effect will be up here.

I understand what you're getting at with Melbourne. I lived there for my first 27 years, and I'm probably down 3-4 times a year so always keeping an eye on things. It always amazes me you can still get decent homes or units (out east) for well under $300k not too far from the city and with decent infrastructure. Here, very hard to find.

As you say though, there is no huge hurry. My current lease runs out October so before then really would like to decide one way or the other.

[kincella]

Ok so you are off with a head start, knowing Melb and being able to compare the two...and assuming you are a first home buyer...that grant would be lost on you if you pay 100,000 more in Qld compared to what you can get in Melb...with the fhbg you have 12 months to move in...check first , each state has different rules...

I look at the long term, believe rates going down big time...is a huge incentive...then later inflation will be the key....govts world wide printing money....so down the track your money will buy less....meaning when we come out of the mess and things settle down...I believe house prices will rise.....
and the upwards trend for over 100 years will continue......
cheers

[Joe]

I'm a Brisbanite and keep an eye on the local market.

If I was in the market I would be buying as close to the city as possible but buying a house with land, even if it was only 2 bedroom rather than a unit or townhouse. Ideally there would be room to extend the house a little, add a deck or build in underneath. I would definitely be looking for a property I could add some value to.

I'm a southsider so pay closer attention to the market on this side of town. Suburbs I would consider are ones like Carina, Cannon Hill, Murrarie, Mt. Gravatt, Holland Park.

Houses are still available in these areas for sub $400k if you hunt around.

East Brisbane, Greenslopes, Coorparoo, Norman Park and Morningside are now getting a bit pricey although you may be able to find something in Coorparoo but down near the train station, not up near Camp Hill which is the ritzier part of the suburb. Speaking of Camp Hill you may be able to find something there too if you look carefully, although you are more likely to find something more affordable on a busier road on the Carindale side of Camp Hill.

Anyway, just some general thoughts. :)

[Joe]

FYI, I moved all the off topic posts to this thread: http://www.aussiepropertyforums.com/forums/showthread.php?t=1

Lets keep this thread on topic. We can continue chatting about APF over there! :thumbs:

[Beej]

Waiting a little to attend OFI's, as to not get on the nerve of agents too much as a window shopper, but will get onto the ground in a couple of months.


Thought I'd put my 2c worth here. Never worry about "getting on the nerve" of real estate agents! To properly research your target market and ensure you get the best deal possible in the future you do need to get out there and see what is happening on the ground in your target market as early as possible - you can then really see/understand how the market is moving/changing with much more insight than raw stats will give you. If you go to any OFIs just tell the agent you are just "doing your research" and looking at buying a few months down the track, but are not yet ready to buy. They won't bother you too much if you say that. Don't tell them any more than that though, Ie don't answer any questions about budget, time-frames, your circumstances etc just yet (just be vague), save that info for later when you can use it to your advantage. Give them your mobile and ask to be kept informed of any developments re the price or sale of the property you inspected.

In terms of the whole dealing with agents thing, as either a seller or a buyer, there is a great show on Foxtel Lifestyle channel at the moment called "The School of Home Truths", which is actually very informative on this issue! It's an NZ based show, but worth a look for sure if you are able to view it.

Cheers,

Beej

[kincella]

beej, good to see you over here...
I just looked up Redfern....for sale prices....thinking it may have been remotely comparable to the Detroit situation...as per the other thread on the other site...
amazed at Redfern prices...over 500,000...1.20 mill etc
have the natives moved on...??? heard it was pretty grotty a few years ago...
and a lot of trouble there....maybe there are pockets of trouble and some areas are ok ??
just wondering if you know the area...
cheers

[Beej]

beej, good to see you over here...
I just looked up Redfern....for sale prices....thinking it may have been remotely comparable to the Detroit situation...as per the other thread on the other site...
amazed at Redfern prices...over 500,000...1.20 mill etc
have the natives moved on...??? heard it was pretty grotty a few years ago...
and a lot of trouble there....maybe there are pockets of trouble and some areas are ok ??
just wondering if you know the area...
cheers

Hi Kincella - re Redfern, let's not get into too much of a discussion on that without starting a new thread. But short story is Redfern is in the process of mass gentrification, which started even 10 or more years ago. There is one street ("The Block") which is the problem area, but apart from that many parts of Redfern are highly desirable to many, and as such there's been a lot of renovation etc going on and property value growth there has been above the trend ever since. In fact, the current series of Hot Property on CH7 (Sun 7pm?) is currently featuring 2 sisters doing an owner-builder reno on a Redfern terrace I believe.

Cheers,

Beej