Hi there, my name’s Ben Everingham and I’m the director here at Pumped On Property, and in today’s video we’re going to talk about houses that are currently selling for under $400,000 within 16 kilometres of Brisbane CBD right now.
G’day, my name’s Ben Everingham and I’m the director here at Pumped On Property, and in the last couple of years I’ve helped clients from all over Australia and the world buy investment property in the Brisbane market. At the time of recording this video, it’s 2017, and I really like the outlook for the Brisbane market.
The reason I’m recording this video today is because I am so, so, so sick of the bullshit that I’m reading in the newspapers and on TV about housing un-affordability issues in Australia. Anyone that follows actual data as opposed to the crap that’s in the media right now, you’ll notice that housing is actually 20 to 30% more affordable than it was in 2007, 2010, 2011 and ’12 in Australia.
If you look at some of the data as opposed to reading the headlines on the glossy papers I call them, you’ll find that there’s some incredible opportunities still in the Australian market. Yes, Sydney’s bloody expensive. Yes, Melbourne’s almost as bloody expensive. Yeah, it’s tough to buy property down there at the moment, but you would be crazy to buy down there at the moment with the prices and the speculation and everything that’s occurred.
While the outlook for those markets long term look fantastic, if you’re an investor like myself that’s looking for that long term result as well as a short term uplift by timing the right market at the right time, then Brisbane looks very interesting to me. We’re not talking about hot spotting here, we’re not talking about crazy growth. We’re just talking about nice, consistent returns over a ten to 15 year period.
What I wanted to talk about specifically is this myth of un-affordability in the Australian market at the moment, and I literally can’t stand it. Just because you need seven to 13 times your average annual salary to buy a home in Sydney now, and you need 20% deposit is going to be somewhere around that $200,000 mark now, doesn’t mean that that is the Australian market and you can put everything in the same basket. There’s incredibly affordable properties in great locations very close to Brisbane CBD.
I’m not going to tell you the specific suburb names today, because that’s not fair to the people that pay for our services as their buyer’s agent, but what I will do is point you very close in the right directions so that you can just realise more than anything else that there’s some great options currently available in Brisbane as of 2017.
The first area I wanted to talk about is the southeastern side of Brisbane city. Now I’m not talking about Logan, down there in the ghetto that for some reason everyone in Australia’s talking about right now. I’m talking about Brisbane CBD, Brisbane city council area where the quality properties are closer to the city. There’s a couple of suburbs down there that you can still purchase properties, and I’m not talking about units or townhouses, which I don’t personally like outside of Sydney or Melbourne. Obviously Melbourne units at the moment are a definitely no-no. I’m talking about quality houses on 500 to 600 square metre blocks, three to four bedrooms, two bathrooms, one to two car accommodation, built somewhere in the last 50 years. Some of them built a lot sooner than … what am I trying to say here? Some of them built a lot more recent than 50 years ago. Wow, that took me a while to get out, I’m sorry.
\This particular area I like for a number of reasons. One, it’s within three kilometres of one of the largest universities in Australia, in Brisbane. Within four kilometres there are about five train stations. Within another four to five kilometres is one of the largest Westfield shopping centres in Brisbane, and more than anything else I like two of the neighbouring suburbs to the suburb that I’m specifically talking about.
One of their neighbouring suburbs as of 2017 is valued at $660,000 for your average home, and the neighbouring suburb directly next to it is worth on average $720,000 for your average home. Where you’ve got this little suburb that’s an up and comer, blue collar, some migrants living in there. Some people on housing commission still living there, although the government’s selling them out at about one to two properties a month at the moment.
This little suburb sitting there, and the average purchase price of a house in this suburb is $370,000 with an average rental return of between $370 and $400 per week. That suburb is between 14 and 16 kilometres from the CBD. It’s super interesting from my perspective, very affordable and for those of you thinking of buying some crappy unit in Brisbane or some townhouse, just completely avoid that product at the moment. When you can buy houses at these sorts of prices now.
What I like about this suburb is that over the last ten years it’s grown by more than 4% per annum, and it’s just consistently ticked away over the last three years that we’ve been buying, and it’s been really growing by that 5-7% per annum. Some quarters are great, but it’s just that long term one next to some very expensive suburbs that I think has got great potential.
That’s the southeastern side of the city. The second part of the city that I like at the moment is the northern side. Obviously there’s some very, very, very expensive suburbs on the northern side, between two and ten, 11, 12 kilometres from the city, and some very expensive suburbs even up to 16, 17, 18, 19 k’s from the CBD. The suburbs I’m talking about now are between 19 and 24 odd kilometres from the city. I personally own property up that way at the moment.
Some of the things that I like about this area is one, it’s fricking cheap, and the growth hasn’t got up there yet. Like the growth in the last ten years has been super average up on the north side of Brisbane, and these suburbs just haven’t really done too much in the last three years.
There’s new train stations that have just been built from scratch and opened up in these suburbs, or the stations being completely gentrified and redone. Now you can get a train from Brisbane through to the north and out to the beaches, which is the first time that that’s happened. That’s a very, very positive sign long term in terms of infrastructure and enabling population growth to occur in those areas.
\There’s also a university that’s proposed, that I think is starting construction later this year, which will house 30,000 students over the next 20 years. That’s huge for north Brisbane because at the moment all those kids that grow up in those areas have to go to the Sunshine Coast or into the city for campuses. Population growth in these areas look fantastic. Yields are very, very good in most of the suburbs above 5%.
Prices are very affordable, like if you’re shopping at the very bottom, you can probably pick something up for $340 to $370,000. If you’re more like me and want to buy a more premium pocket of the suburb, you can definitely buy off a $400,000. One of the cool things about these areas is you can buy your house, you can get your tenant, they’ve got low vacancy rates, and then you can potentially build your secondary dwelling or granny flat in the backyard at some point in the future if you’d like to. That might cost you $110-$115,000, but at the moment I run a property management business up here, and we’re getting between $270 and $300 a week for these places.
As a cash flow option they look good, as a long term capital growth option, whatever Brisbane does these suburbs are going to benefit from. It’s not going to break any records, but you only need a 4% or 5% gain per annum over the next 15 years, plus buying well, plus doing a little bit to the property for it to really double in value. That’s what you should be looking for, so it’s another very affordable option.
For those of you, the third part that I wanted to talk about was Brisbane’s northeast, which is some of those beach side suburbs that I like. We just bought a property for my sister for literally $370,000, 600 square metre block, four bedroom home. Lucky she’s got a builder as a partner, because it’s a shit box and it needs a lot of work, but she’s looking at getting a tenant in there and cleaning the property up over time.
It’s got room in the backyard for a granny flat if she wants to do it. It’s got plenty of potential to add some value, and if she was to clean it up properly and spend $50,000 on it, a property like that in that suburb would be worth $450, closer to $500,000 right now. Sub-$400,000 the pickings are few and far between on the beaches, but if you’re prepared to get your hands dirty and get a bit active, there’s some great renovation properties in those areas that the majority of the marketplace just throw their hands up about and go, “That looks like too much hard work.” They’re also significantly under market value if you know what you’re doing in terms of a renovation.
There’s three great examples, southeastern Brisbane, north Brisbane, and northeastern Brisbane on the beaches there where there’s some great property at very affordable prices in Brisbane right now. Again, houses are what you should be targeting in Brisbane, completely avoid units or apartments unless you’ve already got one there.
In terms of some of the results, again you’re talking sub-$400,000, most of these suburbs have great rental yields at between 4.5% and 5%. Most of the suburbs I’m talking about, particularly in the northern Brisbane areas have the potential for a secondary dwelling in the future. There’s a lot of un-renovated properties that haven’t been touched in 20 years in those areas that if you’re a bit more active like me you can get your hands on, and fix up, and add some value to.
The vacancy rates in some of the suburbs I’m talking about are below 2%. Some of these suburbs are predicted to do, according to Residex and RP Data’s reports, between 4% and 6% or some of them even 7% or 8% per annum for the next eight years. Again, just because you’re talking about cheaper property doesn’t mean you have to sacrifice long term capital growth or the ability to add value or the ability to get great cash flow in the future.
I hope today’s video has been interesting and more than anything else I hope you walk away going, just because Sydney and Melbourne are bloody expensive doesn’t mean you can’t get into Brisbane and get some great property. Brisbane long term has always been Australia’s third most expensive market. Right now it’s the fifth or sixth most expensive market.
There’s population growth occurring, there’s infrastructure, there’s people that live up here like me that want a better life for myself and my future, and want to make more money in the future. It’s not all just the people that left Sydney and Melbourne like the old days that were coming up here for a cruisy lifestyle or as my friends say, retirement. There’s lots of stuff happening at the moment. It’s a city of 2.3 million people, and it’s definitely worth considering, and to compare against the other great markets in Australia right now.
So they’re the spots that i like for under 400k within 16 kilometres of Brisbane CBD.
Happy house hunting, until next time, thank you.