Welcome any advice but not criticism.
I’m a first home buyer looking to purchase a 1 or 2 bed apartment within the inner circle of the Brisbane CBD (north, south, east or west). I have a very healthy deposit and will probably only need 40% to 50% finance for a $500000 purchase price. I’m in no rush to purchase but have been told the buyers market may only last until mid next year. Should I look to purchase now or hold off until early next year?
Thanks in advance
Not true. Brisbane dwelling prices peaked 20 months after interest rates were cut to 0.1% in November 2020.
It is fair then to expect prices will bottom 20 months after interest rates peak at 4% circa June 2023:
https://www.asx.com.au/data/trt/ib_expectation_curve_graph.p…
Hence Brisbane prices won't bottom out until early 2025.
Also, there is no more pandemic induced northerly migration from NSW & VIC
Brisbane prices are crashing faster after its peak than Sydney did:
https://www.corelogic.com.au/our-data/corelogic-indices
Hahahahahahaha
November 24 will be the best day to buy in Brisbane. I, like most others am always right with predicting house prices.
Morning or afternoon?
The plumber's coming in the morning
Especially if it rains that day.
The day before the summer flooding begins?
You can ready get sandbags from the council.
What a shitshow 😂
OP's question has been answered. Close thread.
I didn't know BOM can predict Brisbane floods this early in advance.
Sorry, it is predicted the end of the world will be on October 30th at 11:54
No housing will be available.
Sell now.
which year? or do you mean November 2024?
If you are going to live there, worry less about the perfect timing - which nobody can tell you - and just find a nice place you like.
The "market" is just the average of many individual sales, some a bit higher, some a bit lower. Your home is the place you spend your life.
I'd rather pay 5% too much for a place I love than 10% below as a "bargain" for a place that is just average.
And if you really want a prediction, I think prices will be pretty flat. Prices only drop meaningfully if there is a lot of unemployment. Sure, growth might be absent for a while, but few people will sell at a loss if they aren't forced to do so.
My advice is to not buy an apartment.
Lol at the negs. Oversupply of apartments, poor construction quality, having to deal with and pay strata, let alone live 2cm away from 20 other people, yeah what a great idea 😂
And the 100k special levy after the waterproofing fails and warranty runs out. I agree don’t buy an apartment especially one built since 2000 with a flat roof/render. If you can’t afford a house where you want to live, look a bit further away from the city.
I agree don’t buy an apartment especially
Also agree. Avoid CHEAP AND EASILY AVAILABLE apartments.
Buy instead a $22,000 per square meter penthouse or, even better, a whole floor in a new luxury building.
You are welcome.
I'd amend this to just don't by in a body corporate and don't buy anything built since 2000 with a balcony.
Of course, houses within the Brisbane LGA are mostly above the OP's $500k budget now.
built since 2000 with a flat roof/render
What is the reason behind this?
and does it apply to houses too?
Your advice is good, I'd guess the negs are because you didn't explain why.
You won't know when the bottom of the market is until it has past. If you've got cash and can go unconditional on finance find a motivated seller and bargain hard.
There's no smarter advice than people who are paid to predict such things as a full time career, such as big 4 bank analysts. With interest rates going up rapidly more or less nobody is predicting anything other than small to modest falls between now and early next year.
At worst between now and early next year prices should remain stable, with the prospect of a 5-6% fall. Under the circumstances, the worst you might reasonably expect is to pay the same price early next year as you'd pay today, and you might save a couple of bucks.
My advice is that you're better off using the time to be a bit more strategic about what you pick up. You can take the time to ensure you get the right property rather than just charging in due to FOMO. If you find something great, instead of just adequate, that's the time to jump in. Look for desirable location (especially close to public transport and education), good parking, low body corporate fees, build quality, attractive views, etc.
Big 4 bank analyst made me think of high yield car investments….
If you do 2 mins of reading (try google), you'll see house prices in Brisbane jumped massively during the pandemic, but apartment prices didn't.
And in the last few months, house prices have started to decline due to lack of affordability, while apartment prices are steady or have started to climb. My guess is that people who can't afford to enter the house market are buying apartments instead. Actually this seems to be a nationwide trend.
But the important question is whether you find the right property, the one that you really want. If you find it, buy it. If not, hold off until you find it.
The risk of losing the opportunity to buy your ideal property is more significant than the risk of losing a few thousand $ by buying a few months before the market bottoms out in my opinion. Especially if prices aren't actually falling.
Without the benefit of hindsight, it's virtually impossible to predict the lows and highs.
What AngoraFish said is good advice. Focus on what's right for you.
Adding one thing. Opportunities may arise where people get themselves into financial hot water and need to sell fast. Get yourself in a position where you can act immediately. I found one opportunity at about 7pm one night. Slept on it and by 9am the next day they were already gone.
I found one opportunity at about 7pm one night. Slept on it and by 9am the next day they were already gone.
What opportunity could you have possibly lost between 7pm and 9am?
Long time back, found some cheap appartments. Like really cheap. Sold overnight.
I think ForkSnorters(?) point is there is nothing you could have done at 7 pm to have changed the outcome of that sale - it was effectively a done deal.
Cashback at liquorland
Didn't Queensland just started the new property investment land tax? Loads of property investors with a property in Queensland are crying foul threatening to sell or increase rents. Looks like the properties in Queensland will be going down more on top of the current property "crash" that is already happening. I would wait at least 6 - 12 months and see how it plays out.
Any time someone introduces a $1 fee Henny Pennys in the real estate industry claim the sky is about to fall in. There is no property "crash", there's a percent or two off on month on month totals, down from annual double digit compounding growth rates over decades.
Property investors are not charities. They will continue to invest in property for as long as the potential for long term capital gains stays high, and they will continue charging every last cent in rent they think they can get away with.
The prospect of a mass-market investor exodus out of property into Wesfarmers shares is literally zero.
Actually, I just read up on this, and this change only addresses a loophole where interstate property investors in QLD were paying less land tax than non-interstate investors.
It seems fair, because interstate investors can save thousands each year by spreading their investments across states to remain under the land tax threshold in each state or to pay the lowest land tax rate in each state even though the overall value of their properties would qualify for the higher land tax rates if held in one state.
It may cause a few interstate investors to rethink buying in QLD, which could affect the market. But seems unlikely as QLD properties prices are still much lower than NSW and VIC, and most of the interstate demand in QLD has been driven by owner-occupiers, who do not have to pay land tax.
Its not a loophole, its the same way everyone is treated state to state, ie you're only taxed on what you own in a certain state.
The queensland changes make it so that youre taxed on land you own in other states by reducing the threshhold land tax starts at.
There's no loophole there, just a greedy government who has spent all the tax payer's money needing more
But just say you owned two $600k investment properties in NSW. You would pay land tax, wouldn't you?
And if you owned two $600k investment properties in QLD, you would also pay land tax.
But if you owned one $600k investment property in NSW and one $600k investment property in QLD, you wouldn't pay any land tax at all.
That seems a bit unfair. This is what the change is addressing.
@ForkSnorter: Correct, but land tax is a state tax, not a federal one, so it is unfair for a state to levy an extra burden on you for something that isn't linked to them. They cant tax you for land owned in another state, so instead they're reducing the threshhold to effectively do that.
People will just pass costs onto the queensland tenant. The reality is that national rental vacancies are now less than 1%, so they certainly can
Besides, land tax is a very inefficient tax, and ends up being born by those who can least afford it, ie tenanta who arent able to buy their own homes. As I said, its governmental greed/poor financial management at play here, not fairness, regardless of how they try to spin it
Besides, land tax is a very inefficient tax, and ends up being born by those who can least afford it, ie tenanta who arent able to buy their own homes
But the tax could also discourage investors from buying/owning too many properties, which would free up more properties, creating less demand, and helping to lower property prices. This might result in people on lower incomes being able to afford to buy a house.
The land tax only really affects the super-wealthy, who own multiple investment properties.
@ForkSnorter: Honestly it will only be an issue if they can't pass the cost on, and in the current market, they can. Some will sell on principle, but many will just factor in the cost.
Besides, once over the threshold, it doesn't matter. People will just structure things differently, or through a trust meaning that they're in the same position, but Queensland property is quarantined from their other investments. It really only deters smaller investors who have one property elsewhere, or Queensland residents whose interstate investments reduce the tax-free threshold available to them in Queensland.
Interesting you talk about the super-wealthy property owners, I'm an accountant, and in my experience, the super-wealthy don't bother with too many investment properties, they have businesses, or other investments which provide better returns; property is generally favoured by salary earners, normal everyday people. My teaching clients in particular have more rental properties than any other category of client.
Investors will increase the rent when they can, not when they want or because of X. Threatening it is complete bullshit…. they would do it tomorrow if they can get away with it.
They will never hold off raising because of the goodness of their heart.
$500,000plus is a townhouse range for inner city (10k radius). I would aim for this. Bought myself a place back in 2019 for 430k as owners family fell apart and that was a rushed sale. They paid 480 back in 2018. Now the estimates are 660k, but I believe it should be not more than 550k… My friend bought 2 apartments in Fortitude Valley off the plan - price still flat, and body corporate is around 7-9k per annum vs 2.5k for townhouse
Buy now.
Regret later?
Well, inflation is still running hot and it looks likely that the US Fed will hike by 75-100 points. RBA will likely be forced to hike by at least another 50. At least.
Best guess is Brisbane property prices have another 15-25% left to fall.
Welcome any advise but not criticism.
This is Ozbargain, you generally don't get to pick and choose.
As for me, i'd wait 6-12 months rather than catch a falling knife (property prices are falling at their fastest rate in 30 years.)
Actually Op has not stated whether it is an investment or owner occupier. As the answer could be different.
If you find a place you love, buy it.
Having said that, avoid apartments at all costs.
You’re best to wait. Interest rate rises have a lag effect, property will likely be cheaper next year. Brisbane prices are going downhill (bye bye equity 👋).
HODL
buy a house
body corps suck
No one knows but I'd give it 3-6 months based on the recent rate rises
Sunday, 2 October
thats the day daylight savings starts and the cows go MAD
not in Qld, no such thing as daylight saving.
Welcome any advice but not criticism.
Well no shit. No one welcomes criticism. Even constructive criticism is not mostly welcomed either.
Also, you asked this question last year and never even bothered responding to that post as well.
I personally prefer deconstructive criticism. Mixes it up a bit.
I also suspect OP is one of those no means yes types, sadistic bugger wants to be criticised and torn apart. Shrug.
Don't buy in Brisbane!!!
with the Olympics on the horizon that may not be a good long term plan……
Might be worth taking this into consideration to see if will effect your situation at all in terms of any flow-on effect that is?
https://www.realestate.com.au/news/ludicrous-new-tax-will-gu…
A looming tax on property investors in Queensland threatens to put significant pressure on the already struggling rental market, with warnings tenants will ultimately pay the price.
From July next year, the State Government will impose a land tax on landlords that’s calculated based on the value of all property investment assets everywhere in Australia – not just in Queensland.
So as usual their only response to the housing affordability crisis is MORE TAX? How about less tax on housing and new houses?
Nah couldn't do that, it might help the people a bit.
Dirty thieving ****s.
Reducing demand from investors bidding up the price of existing housing stock improves the affordability crisis as it means that there is less pressure in the market pricing out first home buyers. And given materials and labour shortages in the construction industry right now, even extra new builds currently put significant upward pressure on prices.
The only thing that is really going to take heat out of the housing market is a massive low cost public housing construction program and reduced immigration rates. Taxes are a tiny fraction of the problem, and even there, mostly contributing to it due to housing having far more favourable overall tax treatment than pretty much any other investment.
Of course, if the price of houses were dropping, one suspect that real estate investors would be squawking about the tragedy of that all as well.
Regardless, taxes pay for a lot of things, like hospitals, roads and police. Sure, you'll no doubt be able to pick and choose a bit of waste, and some programs that you don't personally benefit from, but overall society is much better off as a result of the taxes we pay. In the scheme of things, after decades of annual double digit capital gains, housing investors have the capacity to pay a little more.
Well I wont get into a tax debate on it, there was a thread here a couple of weeks back where I detailed just 'some' of the wastage and was atrocious, it's a very long list.
Regardless we don't need MORE tax, it NEVER solves anything, if government can't work within it's resources then we need a much smaller government with competent and honest people in charge. Yeah, and flying pigs. I know.
In terms of this new tax investors might not sell up and instead hold their properties and put the rents up which would place further pressure on the current housing crisis. or maybe it will be a a mix of both? We'll know more as the time approaches.
Cheers
If the real estate industry starts near the top of the list for eliminating waste, special deals and interest group rent seeking then I, for one, am all for it.
But as to your later point about investors "putting rents up", taxation is literally irrelevant to that decision. Real estate investors aren't keeping rents artificially low right now out of charity. Rents are charged at exactly what the market can bear, no more and no less.
@AngoraFish: Huh?
So are you suggesting that after the landlords 'cost of production' goes up courtesy of belligerent government policies that they wont put up the cost of their product (i.e. rent) out opf the goodness of their hearts?
@EightImmortals: yes, that is correct. The landlords will put prices up when they can, it has nothing to do with the cost of their "product". A landlord that has the house paid 80% will still put the rent up no matter what his payments are. A landlord that has a rental place paid 100% will not charge 0 rent because he has no repayments…
In my area a house that costs 1.400.000 is rented for $700, which does not cover the mortgage… however, the landlords cannot raise the rent to $1500 (to cover the mortgage) because of the market. They can rent it for $700 because that is the maximum that they can get.
Nobody said out of the goodness of their heart…. that is your argument… you say that even though the landlords could put the prices up, they do not because they have a good economic environment. That is bullshit… they will put the prices up WHEN THEY CAN no matter anything else.
@EightImmortals: Wherever did you get the impression that the 'cost of production' has any bearing on pricing whatsoever, other than setting a minimum below which someone goes broke or sells out? If cost of production was relevant to anything at all we'd all be paying $50 for sneakers, not $200.
But let's run with your 'cost of production' line for a second. How is it that houses purchased 20 years ago somehow seem to charge the same rents as houses purchased earlier this year? How is it that houses negatively geared up to the nines charge the same rents as houses owned outright by the landlord? The whole idea that rents have any significant relationship to an investor's cost base is beyond ludicrous.
@AngoraFish: "Wherever did you get the impression that the 'cost of production' has any bearing on pricing whatsoever, other than setting a minimum below which someone goes broke or sells out? "
So you are saying that the cost of production does and does not effect pricing? srsly? Of course there has to be a minimum price and if the government keep jacking up rates and taxes and adding new taxes then that minimum cost WILL go up.
"How is it that houses purchased 20 years ago somehow seem to charge the same rents as houses purchased earlier this year?"
How do you KNOW that? Can you post a link to historical rent costs over the last 20 years or more?
Assuming your assumption is true then we could explain it in a couple of ways:
Firstly, if an investor bought a house 20 years ago they would (or at least should) have paid off a lot of capital in that time meaning they are paying less interest to the bank so can afford to keep the rent stable.
Secondly, interest rates have gone down over the last 20 years, in 2000 the rate was 7.75% peaking in 2008 then declining ever since (until this year) ( https://www.finder.com.au/historical-home-loan-interest-rate… ). That being the case as the landlords bank costs go down they could also afford to keep rents stable.
"How is it that houses negatively geared up to the nines charge the same rents as houses owned outright by the landlord?"
What does that even mean? Are you saying landlords should lower their rent just because they own the property outright? Why wouldn't they keep the rent the same and use that money to offset their monthly costs on the rest of their portfolio? Or buy a new car?
"The whole idea that rents have any significant relationship to an investor's cost base is beyond ludicrous."
Sure champ. You still have explained how that is even possible. If it costs X to produce something or provide a service then the cost to the consumer HAS to be X+ 'something'. You even said so yourself at the start of your rant.
Lets see how clever you are as we get closer to June.
@EightImmortals: the funny thing is that rents will go up, because of demand not because of costs… you will be right for the wrong reasons…but after reading your arguments you will just misunderstand that and gloat anyway… you are not even getting the argument that landlords will increase or keep the prices depending on the market (supply and demand) not because of their costs.
@misu p: Yes supply and demand is another factor. All I was doing was pointing out to the OP another tax on the horizon whixh 'might' affect house prices in QLD. If others want to make a massive song and dance production out of it then that's on them. :)
The wisdom I've heard is that as interest rates climb and start to bite home budgets, among the first assets to get dumped will be the investment properties. Prices are not likely to climb. This is classic bubble territory and most people, to be able to afford to buy into the market, will either need prices to come down or wages will need to come right up.
The riskiest investments tend to get dropped first. Property is safe compared to say, crypto. Things will have to get really bad before there's a big crash in property, more likely just stagnation.
Unfortunately Australia has locked itself into this stupid cycle of investment properties for the long term - rather than actually producing something.
We have only had a couple of months of rate rises. Hold out for a while yet, the pain hasn’t filtered down to where it needs to yet.
Unless you’re buying with the intention of staying, then who cares what you pay comparatively, as long as you’re happy with it.
Today there is downward pressure on the housing market. Some locations are blue chip and will always hold value however. For that type of stock you’d apply the old saying the best time to buy was 20 years and the next best time is now.
Spot on. Wish I had bought in manly15/16 years ago… 2 acres for 400k. Manly was too far from the cbd (12 or so km rofl), and on the bay so nobody wanted to buy there. I would love to see the price today haha
Yep - houses in my area are still going quickly and prices haven't really dropped (moreso stabilised).
As many have suggested: don't focus too much on perfect timing, concentrate on the best buy, the best home of your dreams instead.
Time in the market is far better than timing the market
if you come across an okay price and a property you like might as well go for it. if your keeping it long term, then price doesnt matter too much as long as you didnt pay silly money at first.
Best time to buy is when someone else needs to sell.
Stale aged listings. divorce, death, settlement issues somewhere in their purchasing chain
people don't sell unless they have to.
MSM has been talking up a real estate bubble for 10 years but regulation in Aus isn't the same as US.
With that much savings you could smash a mortgage on an median salary.
In Brissy - buy a house.
Time in the market > timing the market
Property investors haven't read Jack Bogle's books lol
This guy’s been on the fence since 2017, been asking the same question almost every year.
And? I've been on the fence since 2007 lol
You wouldve missed the dips to buy.
You’re basically waiting for nothing or that 50% crash thats never going to happen.
Pretty much. I'm going to buy soon and THEN we'll get the 50% crash ;)
buy it now
You ask the same question every few months, over several years. And you don't respond to feedback provided to you
I think you have a healthy deposit of 50-60%
I would look for a great property, one that is in good condition and a good price.
If it were me, I would buy when such property comes up.
It doesn’t matter too much if property goes down a little (it does matter if go down a lot.) but if it is your principle home, you will hopefully be living there long term for the prices to go back up (hopefully, likely in the long term future because of inflation)
People might be selling cheaper as interest rates are going up and have been these days and property prices are going down a little in general.
It’s already gone up in a lot of places above 20% before last year, if they went down 10% recently, they are still 10% higher then before.
So I suggest buying a good property when you have the chance and keep saving principle if it suits your finances and plans.
Great answer! When you say great property do you have in mind any specific category house/townhouse/apartment?
I was thinking great property as in one that is suitable for OP and one Op likes. everyone considers a great property slightly differently. Location, build, car space, noise, view etc.
For me personally, in todays market.
House 3 bedroom, 1 bathroom, 1 car space. Small land
One that I could afford to pay mortgage comfortably and at low price. While I have more Money put in offset. That way, can pay off house less than 15 years.
One near train and bus line. About 10 min walk.
Close to shopping areas and food restaurants.
30 min from Brisbane city specially by car or train or bus
One that is brick built, good structurally, recently like within 25 years and little maintenance.
One that does not flood or have other natural consequences like landslide.
No strata fees.
Outer Brisbane have these property for about $600,000. Good value.
It's very difficult to perfectly time the market. That being said it does appear that housing prices will generally fall across Australia in the short to medium term.