Property cycle

Check out Herron Todd White’s month in review on line – it usually does a good job of illustrating where capital and regional markets are at.

Cheers

Jamie

GC is in ok part of cycle for buying after 8yrs limited growth but huge due diligence required as there is so much rubbish stock. You need to know what sub location, property type and price point to buy into to get the best opportunities.

Well part of the problem is most sellers in Australia provide you with Gross returns however these sort of returns are useless only the net returns count. In the Gold coast many of the apartment complexes have huge body corporate fees. One of the largest towers charge $40 a month just for statements. So look carefully at body corporate. do not buy new or off the plan you will pay through the nose. Look for even older hoe within walking distance to the beach that could possible be redeveloped. I Importantly look at as much as possible before making any decision.

Finally do not listen to crap especially from marketing companies. They will tell you to buy new for better tax deductions. New property can be like buying a new car you are paying for the development profit and yes the values can fall.

• This reply was modified 8 years, 9 months ago by  Nigel Kibel.

Hi CoolKid,

What do you mean as in rubbish stock? I have been looking around Nerang.

I won’t guess what “BuyersAgent” meant, and he will likely reply soon anyway. For mine though, the Gold Coast has LONG been a haven for some unscrupulous figures and/or companies. Their modus operandi is to FLY buyers in from cities lke Sydney and Melbourne (for FREE – yer, right!!!) and SELL them poorly built new houses/apartments at over-the-top prices.

Usually these would all be new and often OTP (off the plan – i.e. doesn’t exist yet), in greenfield estates commonly. Now, I don’t know if Nerang was ever a place where this went on – others might be able to help. If it was, it could go back 30 years or more. Ones I can mention currently are Coomera and now Pimpama. They are often characterised by being minimal land sizes, often in areas that still have little infrastructure, and their initial sale will be showing a “higher-than-usual price”.

I would think your best defence when buying any older property is simply due diligence – check a house’s price against other similar properties thru several RE agencies.

Be sure to have a proper Building Inspection as part of your contract conditions, then PORE OVER the report the Inspector will provide you. Talk to neighbours and shop owners in the area where you are looking to buy, questioning them about their place (e.g. did they buy their house new, who from, good deal or not, was their house good value from day one, etc). Do they know any stories of marketeers who might have “come unstuck” in that area…. etc.

Some areas are old enough now to have become good value (infrastructure is now in place, early owners have worn the cost of the “too expensive OTP house”, and any structural problems have been fixed by them or subsequent owners). So, don’t let the history of an area throw you completely – a house will be good value, or not – and usual DD will identify this.

Let’s see what “BuyersAgent” may have been thinking….

Benny