Need some advice please.
I hear on the news that there is a current oversupply of apartments in and around the Brisbane CBD which is affecting prices in the negative. As a first home buyer looking to purchase an apartment to live in around Brisbane, I would like to know, is this oversupply true and how long it will last before prices start to increase. I am looking to purchase end of this year or beginning of next year.
Thanks in advance
That's poor advise!
Hi OP
There is some truth to there being an oversupply in Brisbane CBD. Some landlords are throwing in months of free rent to find tenants due to this.
Some banks have restrictions on how much they'll lend on these apartments so that's something to look out for. How much deposit will you be contributing? A bigger deposit will help IF the bank valuer can't justify your purchase price and will give you a good choice of banks/lenders.
Cheers
Australian market has topped out (to a degree, all boats rise and fall with the tide). I would be renting and building up your deposit. Make sure that you and/or your partner are in a watertight secure occupation. There should now be zero panic by apartment buyers now. Pressure will come onto sellers & developers and the market is sure to have a big shake out.
there are a lot of apartments being built over on south bank as well. possible over supply
When the gfc happened, it took 5-6 months for the panic to build and affect our market, prices dropped about 5-10%, and then it rebounded within 3 months. So timing is important in the property market, the downswing takes a while to take affect, and the upswing is very quick to follow usually. The only time this doesnt apply is in recession/depression conditions.
Depends where exactly you want to buy, but I think buy now. I think we are at the bottom of the cycle. I am a property investor in Brisbane and know the market quite well. Some suburbs (eg Cooparoo) have actually started turning already.
OzBargin is not the best forum for property related insight. Propertychat.com.au is.
Hey, I'm keen to be proven wrong! Don't just down vote, explain why plz.
I own an investment unit in Brisbane. My feeling have been mixed. In the long run I think it will be okay, as there is plenty of room for Brisbane to grow (especially looking at Syd/Melb pricing). Growth is stagnant though- in the last 4 years the value has remained about the same and sales in the area have dropped in price. I'm happy to sit on it, but I do think I could have probably made more money if I'd put my savings in a managed fund etc.
I'd suggest you don't touch anything new (unless you get an amazing price). The units that crash in value will be all these new 2 bedders going for $500k+ not the established market thats in the high 300's / low 400's (I think those values are quite safe).
where's the boom bust graph ?
we're at denial stage. not even falling yet. once the reality sinks in, you'll see fire sale follows by bloodbath.
but if you don't have enough deposit/cash in hand, don't bother waiting for the downfall coz you'll be fk'ed as well.
LOL on comment above, "at bottom of the cycle"
Property bulls are quick to call minor pull back in prices "the crash". Then go on to say that it is up and away from here.
OP: The simple answer is, does your lifestyle require you to buy property (ie. settling down etc.) ad can your cashflow sustain the repayments even with a small increase in rates? Is it likely that you will earn significantly above what you do now in the near future? If yes to all these questions, get on board.
Although Brisbane is so cheap, better to find a nice house 10+ km from the city with good PT close by and own land. But horses for courses, some people like living in high rises close to the city.
thinking about buying a whopper today, checked my bank and decided against. Houses are cool to
I was talking to a guy who owns investment units in Waitara, near Hornsby in Sydney, 10 years ago he thought prices would fall because they were overbuilding apartments, since then prices have doubled and they are still building apartments. He said it seems the more they build, the more people are attracted to go there so the prices keep going up. Mostly Chinese and Indians.
Brisbane isn't Sydney
There are already a few half finished hi-rises in the city because the builders went bust when they couldn't sell all the apartments off the plan like they were before
Property prices are ultimately driven by economic activity. If you research the Queensland economy you will find it is lagging other states, so it is a poor outlook at this time.
There is a significant over-supply of investment units in Brisbane at the moment, so developers are offering big incentives to unload stock. About 3 months ago a development company went broke and the units were sold at a 30% discount to the original price. The location was about 5 kms from the city on a train line. Finding and keeping a tenant will be the major issue
Larger well located units typically owner occupied seem to be holding their prices.
If you are looking for capital appreciation, wait for the economy to improve, which wont be soon because the Government is hopeless.
If you will live in it, then perhaps yes. There are bargains if you know the right places.
There are units that people have bought off the plan and their money is due for the balance, but with the cHanges to overseas buyers, investment properties and other things, they cannot pay the balance and these units are going very cheap.
However, unit prices as going down, and tenants are hard to find. So gains will be a long time coming.
I agree that you would be better to look for a house.
For Units and Apartments, there are two markets: rentals and sales.
Rentals for U&A have seen some downward trend lately, either in reduction in rent, or free-rent. This has been going on for two years? However, I have yet to see drastic drop in sale prices despite the talk of glut. No fire sale yet. Saw one offering cars but it is not cheap Unit.
Anyhow, it is the Sellars' market right now for U&A. To me this means you get more choices (from Southbank Cooparoo right to Newstead NewFarm). Not necessarily cheap but good value, not exorbitant. I just saw one for $620k 2-bed with riverview, good build. Can practically sell your car!
If this is your first home, I would imagine you'd live in it, at least for two-three years. So as long as you've done your financials and can pay for it (mortgage plus holding cost) it would be great. Find one that has predominately Owner-Occupiers, with minimum facilities (no gym, sauna, rooftop pool….)
Just to be mindful of the future years. If rent does go down when you decide to rent it out, can you afford the negative cashflow? Also unless you are really savvy in this area, avoid OTP Off-the-Plan, esp with long construction period.
I think the government's thinking is build them, and the people will come. Some hope with the Queen's Wharf will bring jobs, but we need more than that.
So OP, my advice is buy it if you like the property and can afford it. I often hear people say "wish I bought that Sunnybank house/land 10-15 years ago. The best timing is YOUR timing.
Nobody here knows the answer.
Nonbody here can predict the future.
Nobody here knows your finances or your plans.
Besides Brisbane is a BIG place these days!
So realy depends on which are of Brisbane and type of property
This forum is the WRONG place to ask this question.
You need to do your own research and work this out for yourself.
Brisbane Newstead, Casino area and Fortitude Valley is weak.
Probably 12 months time not a bad time to buy.
Not sure of your budget etc but there is a lot of Investment grade stock around with v.avg build quality which I would avoid if possible.
Find a few projects that you like the are completing next year and register with the developer. You want to buy if the initial purchaser fails to settle. Demand a big discount of 15%+.
I advise you to spell 'advice' with a c.