Is it time to buy? I have been looking on-line as I am currently overseas. I seemed to have formed an opinion that houses in Brisbane are currently over-priced, and think that I should wait until after the next interest rate rise. I don’t know why I have developed this mode of thinking but it’s beginning to frustrate me.
When I look at what you can get for 300K-350k in Brisbane, I feel disappointed as the houses appear to need quite a bit of renovation to bring them up to a decent standard.
I would like some feedback. Do many investors feel that a 5-10% drop in prices will occur in the next 6 months?As we now have an office in Brisbane http://www.metropoleproperties.com.au I have developed a better understanding of the Brisbane market and I am not of the same opinion as you.
What is overpriced? If the houses were overpriced – people wouldn’t buy them? That’s what the market things property values are.
But rather than follow this line of argument lets look at it another way…..
There are opportunities in every market. Get to know your market well, find well priced properties – look for motivated vendors or properties with problems.
Then ….
1. Buy well – don’t pay over market
2. Get your timing in the property cycle right – that fits for Brisbane now
3. Add value – creating your own capital growth.This strategy of finding problems and adding value is well described by Bill Zheng here
http://www.propertyupdate.com.au/articles/115/1/Are-you-looking-for-problems%3FMichael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 15,000 readers each month.
FREE subscription http://www.PropertyUpdate.com.auHi Interceptor,
Coincidentally I have just finished reading Michael Matusik’s latest snapshot. In it he discusses, at length, the Queenslnad residential markets. Some of the key points he makes are;
1. Last year Qld remainined the strongest growing state in terms of population. 75000 people moved into Qld of which 33000 moved into Brisbane – second to Melb.
2. In 2005/06 118000 fulltime jobs were created in Australia of which 43% were in Qld.
3. SEQ contributes 11% of GDP.
4. 5 mill people projected to live in SEQ in next 50 years.
5. Rental vacancy rate in Brisbane is 1.5%
6. Brisbane market is undersupplied at present by the equivalent of four months.
7. 62% of Qlders think that now is a good time to buy property.
8. Median prices grew by 3% last year in Brisbane.
9. Weekly rents (using two bed apartment as barometer) grew by 11% in Brisbane.
10. Sales volumes up by 82500 over 2005/06In the same issue Matusik does raise the issue of ‘affordability’ and the constraints that may play on some sections of the market.
Derek
[email protected]
http://www.mononpoly.tic.com.au
0409 882 958
Skype – derekjones2113Don’t get hung up with the figures too much. Just offer 20-30% below advertised price and see if any fish bite. And just get into it.
Rember once you’re in it doesn’t matter what the market is doing – if it drops you’ve got opportunities, cashflow positives emerge, yippe, if the amrket goes up then revalue and grab the equity for some more deals. Too simple! But take action ie buy, polish or reno, rent out and be patient.
Oh yes there is no free lunch, if your got IP’s your letterbox needs to be enlarged, better still get a post office box, because the rates, and statements from PMs, bank statements etc will explode in no time. Secondly you will spend a lot of time paying bills, negotiating with PMs, fixing broken bits of properties, keeping the paper up to date everyday and the tax office lodgement – but you do get a nice tidy sum of money back, in two-three weeks if submitted elctronicially.
Thanks to Derek for those yummy figures. My 13 ip’s in seq are looking good. As a specific on rents, one agent i deal with was recently offered a bribe to jump the queue for a rental property in Kingston.
Rents are definitely rising and the market is swallowing in quick time anything that becomes vacant. Its all out there waiting so go and find something soon.
Projections in a recent API has the next boom 2008 to 2010. This means that if you can stomach the startup costs now, may be a good time with a few panic sellers starting to appear, to get a foothold into property. Later this year if the rates rise again then there will be some bargains to be found, so if your gut feeling on those properties you are looking at dont pan out, being pre approved to jump on the bargains later is the right move.
See a broker or three. They will all offer “the best deals” and they will all differ. Get along to some neg gearing seminars as a what not to do exercise as those who are heavily exposed will struggle with further rate rises.
Keep asking questions here as there are supurb seasoned veterans in property investing to share their knowledge and expertise with you.
Dont be afraid to do something. Doing nothing is going backwards.
Happy hunting
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Is it time to buy?Always!!
Sorry I can’t comment on that particular market.
But I wholeheartedly believe that investors who build portfolios in this part of the market cycle are the ones who will benefit. Doing what everyone else is doing when they are doing it is surely a flawed strategy.
Not sure if i have ever read a book describing how a property investor got rich doing that.
Waiting for large macro events in the economy to translate into a value of a house in smith st somewhereville is a mugs game.
cheers
I Buy Property http://www.cashflowproperties.co.nz
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