Hi all,
I wanted to get people thoughts on Townsville as an area for investment. Over the last couple of years there has been a lot of distress sales due to the downturn in employment in the mining sector which has resulted and some great purchases – 2IP’s. with Townville being such a diverse economy. I wanted to know if other have considered Townsville and their general thoughts.
cheers
We purchased a cash flow positive investment in Kelso, Townsville beginning of this year. We saw it as an opportunity to get in while everyone’s getting out, and as were looking to hold long-term – happy with that. The diverse range of industries was a major tick in our books. Also was on terry ryders list a few years back. Think the values may go down in the short term, but longterm expecting some definite growth. Interested to see what others say too!
I have one in Cranbrook at went up by 4% in a year. Townsville is about to get a new “competent” mayor that I pro business and the federal government is doing something about the high insurance rate in North Queensland. All things considered, I’m happy I’ve got two up there.
Key is to be close to the hospital, Uni and Army barracks
We have a property in Townsville that we have had for about 10 years now and, initially, it did have some good growth, but, that has definitely levelled out over the past few years. We have recently been back there for the first time in 8 years and my biggest concern about buying there again is the amount of new construction going on. The city is expanding outwards at a good rate which is what I think has stagnated growth in the 450K+ housing range (ie. why spend 500K on an existing property when you can build brand new). It’s also seen rental income drop because there is now such a large supply in that range and more being built every day. At one point our property was valued at $550k – bank valuations would now put it around $500k due to comparing it with all the brand new construction. We had a look at some properties in the 250-300K price range while we were there as we were considering another property in Townsville. After doing a lot of talking with some of the local agents, they seem to agree that NRAS has had an impact on rental prices and in some areas they are finding it hard to get tenants as they can get a newer build property under NRAS for about the same out of pocket expense as they would be looking at for an older non-NRAS property. That’s not to say there aren’t still good deals in some suburbs but do your research carefully and make sure you talk to local agents to see if NRAS has affected expected rents and/or vacancy periods in the area you are looking at. The other thing to really consider when doing your figures is that Insurance costs for the region are really high – mine have tripled over the past 8 years (despite not needing to make claims on anything) and there are a number of insurers who won’t even insure that postcode at all. Rates are quite pricey, too, compared to other places.
This is just my personal experience with the area, though – I’m certainly not a professional by any means. As always recommended, do your research properly and seek professional advice :)Look at the lower end below £300k. Like Simang says, anything over £400k and you might as well buy a new one -negative cash flow. NRAS has nothing to do with it. Those properties are in less desirable areas like Condon, Rasmussen and Kelso. Your best bet for positive cash are Annandale, Aitkenvale, Douglas and Cranbrook (riverside of Ross River rd not the other side that heads into Vincent/Kirwan). You want your IP as close as possible to the Hospital, Army barracks and University. You get good decent people – normally a transient workforce in the areas because it is close to work. They will normally stay for 2 years before either moving away or buying themselves in the 450+ range.
At under £300k the only way is up really!!!!
Thanks guys some great advice there, I have been thinking about looking at west end, Hyde park etc, closet to the CBD, and looking to buy a large block, split and perhaps build 2 units or something on the vacant block. It seems the council are looking favourable at increasing the density in close to the CBD. It does seem you can get a good block under or around the 300k mark.I like the idea if it ever does happen of the vision of the stadium and CBD development that is planned, although there are a lot of large unit developments in this area also.
Obviously this is the other side of town as to where both of you are talking about to which I haven’t given to much thought previously. Interested to hear any comments.
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