Not Sure that BIS Shrapnel reports are always accurate however it has been my view for some time that the Brisbane inner city market is at least 10% under valuated. Now I am talking about suurbs that are within 10km of the CBD. I am sure that there are locals who know of other suburbs that are also performing well. However if you are buying or own property in inner city Brisbane I would expect that you will do well over the next few years.
My only concern is that with all the changing planning laws that make it easier to develop in Brisbane there is a danger that within a few years you could get oversuppply in the market however for now I do not think there is a lot of downside.
Yep, most reports that I've read recently have indicated that the Brisbane market is on the rise – the last two include the Herron Todd White month in review and the Domain housing report for June 2013.
The current risk with RE markets at the moment is that they're running on hype and BS. 90% of the population wouldn't know what's actually going on from one day to the next and rarely does the average Joe consider fundamentals in general discussions.
As I keep saying to people; market hype, political hype and industry hype can drive a market for only so long. After that if fundamentals don't stack up then the market corrects to reflect reality.
17% may sound good but it's only 5% per year on average. If you aren't getting 7-8%pa then your rental yields better be good to compensate or you're simply going backwards.
The problem for Qld and by default Brisbane, is there is very little economic upside in the short to medium term (3-5yrs) and not a lot of confidence in economic uplift beyond that. There will be the odd suburb or two that will jump for short periods but over the long term their average growth will invariably reflect trend. I see too many investors who get excited about short term jumps in suburb prices and then ascribe some level of general market confidence to these rises.
Most investors don't realise they need to get around 10 -15% CG in the first 3 years just get back to break even on ingoing and the first 3 years operating costs.
I tend to think that making a buck in this market climate will require a much more pragmatic approach than in the past. Those that specialise in particular markets with specific investing methodologies will more than likely do better than most.
some might say you have been sighting the sun to long , but agree a on a lot of what you have said in your post. It takes more than just buy & holds in this market/climate. 5 % yields per year will not get me out of bed I am sorry.
Hey Freckle, some might say you have been sighting the sun to long
LOL.. heading back to NZ in 2 weeks. Snow and rain everywhere…..brrrr.
It's time to circle the wagons. I don't like what I see coming in the next decade. NZ has a small sparse population that is flexible and adaptable. No matter how bad things get NZ will be luxury and security by comparison.