Brisbane Property Update August 2020

https://www.youtube.com/watch?v=MEpWVf4jPQE A lot has been happening in the Australian property market in the last few months. Today we wanted to speak specifically about the Brisbane market, where is it at, what's the good suburbs and are there any good investments in that area? Book a Free Property Strategy Session 0:00 - Introduction0:32 - Quick catch up1:03 - Ben's recent Brisbane analysis2:15 - Comparing the suburbs and finding the winners and losers5:37 - The differences between the different areas of Brisbane7:45 - North Brisbane vs South Brisbane9:13 - Good suburbs vs bad suburbs12:04 - Where is Brisbane at during its cycle?15:37 - Covid infrastructure bailout program16:25 - The Mid-Cycle slowdown18:07 - Getting good long term stability Recommended Videos: What Is The Mid Cycle Slow Down And How Might It Affect Property Prices? Transcription: a lot's been happening in the australian property market in the last few months obviously with the pandemic that's gone down and everything like that today i wanted to speak with ben everingham buyer's agent from pumped on property specifically about the brisbane market which is the market that him and his team specialize in they've just done a whole bunch of suburb research in that area so i thought i'll get on the line with ben we'll talk about brisbane where it's at what's sort of happening and give you guys an update so hey ben thanks for coming on today hey bro good to see you good to see you again too it's been a while definitely man it's exciting to catch up again yeah and so i love that you're in your new office i'm also in my new office which is my van which i've been loving i'm actually parked on the beach i can see the water from here but no one can see it in the video but just know that i got amazing views right now that didn't cost me heat i'm loving it man i feel the same way like this you did cost me a bit this is like a green velvet lens that i've always wanted with like a timber wall behind me but um i'm feeling fresh and loving it as well yeah and so okay so recently you guys did a massive suburb analysis of all of brisbane do you want to first talk through okay why did you do that give us like some touch points on what are some of the things that you looked at for the suburbs and like what are some of the insights that came out of that yes so i think it's important as an investor myself to constantly review the bigger picture as well as the the micro picture um so we know that based on the long term growth of brisbane being 9.7 a year according to core logic for the last 50 years that it is a long term winner we know that a lot of people moving up here at the moment and will be after the virus is over as well and so i just wanted to wrap my head around it which i do about once every year to two years and i look at you know brisbane isn't one market like there's some suburbs in brisbane that you can buy for 200k there's some suburbs in brisbane that you can buy for 2 million bucks and so you can easily get caught in that sydney melbourne brisbane trap which is it's one area but in reality there's east brisbane central brisbane south brisbane north brisbane and west brisbane and all of them have completely different stuff going on as you know yeah and so i know like previously you've kind of focused on like central brisbane north brisbane um but this time around you kind of looked at more suburbs what did you think about the suburbs as you started to look at them yeah so for me personally at this stage i've sort of not been looking too heavily into west brisbane just because there's just so much land out there at the moment that could be developed over time so from this perspective we looked at north we looked at central and east brisbane and we looked at south and southeast brisbane and the way that we do that as a business to get our heads around it is through what we call a suburb profile so we looked at things like vacancy rates how much house prices have moved in the last 10 years three years 12 months what people are paying for places what they're renting for what the average incomes look like what the average demographics look like the ages the school districts the transport the train stations the shopping centers and you know through this like 40 or 50 things that we look at for each suburb we also have indicators or key points that become either a yes for that indicator or a no and so from looking at like 100 odd suburbs we were able to immediately strike out about 60 of them and then from that going into further detail able to strike out a huge amount more so yeah i i love with suburb research it can be super overwhelming for a lot of people in order to do it because you don't know what the data means but i've always seen that when you have a template that you go through and as you do it for multiple suburbs it becomes really clear to see which are the winners and which are the losers when you've got one suburb with super low vacancy rates for example and then one that's really high then it's like oh this is a clear winner you know so you can start to see that so what were some of the things that you saw that really struck out some of those suburbs um you know that's a really good point because there are key winners and in each suburb there's about seven indicators that are deal breakers for me so the first one was average annual price growth in 10 years and we know that brisbane's cheaper to buy now than it was 10 to 12 years ago according to corelogic so every suburb ticked that box because they're all super cheap right now the second one was average vacancy rate so i'm always looking for a suburb with below two percent i mean most of these suburbs were between two percent all the way down to half of one percent like the vacancy rates up here are really tight in some of these areas so we just struck out anything that was above two percent and kept everything below um then what we did is we looked at average household incomes in each suburb and effectively the higher the income the better but that is relevant relative to property prices so if a suburb's got an average price for example of 600k you really want a higher income than 1500 bucks but if a suburb's worth 300 grand for example an income of 1200 bucks might be completely acceptable so we looked at that and then the major indicator was looking at how many people rent in a suburb so for me you don't want too many renters just because obviously there's not enough people to put value into properties over time so we just drew a line in the sand that in some parts of the city that was below 20 in other parts of the city it was below 30 or 40 percent again you've got to look at the whole picture not just the one indicator yeah and so that cut out a bunch of summers you find like major differences between like south east central north like if people are thinking about oh maybe i'll invest in brisbane is one area better than the other or like suited to different investors it's completely suited to different investors so you know you and i'll hopefully shoot another bid on this the single versus um the dual key or dual income stuff but what i found is that brisbane central or brisbane city obviously has the highest prices um the highest quality of homes the highest incomes but they also have the lowest rent and in that particular part of the city you know you can't legally rent out a granny flat or a secondary dwelling at this stage so that's a really good option if someone's looking to buy and hold for the next 15 to 30 years ride the growth wave up with brisbane you know renovate for profit that sort of thing like if they're looking for that real blue chip thing that they could have got in sydney or melbourne 15 years ago and really what we're talking there is within 10ks of the cbd as the crow flies as a circle around the middle of the city yeah and we've talked in previous videos about crazy opportunities that exist in some of those suburbs where like renovation opportunities properties with city views and things like that where you can make improvements to them that can massively manufacture growth in those properties yeah i was talking to a couple of clients about that this week and um one of the options that we saw was in a suburb nine cases in the city in a really sought after locals area where you can buy a house for like 750k and knock it down rebuild like a beautiful hampton style northern beaches of sydney or eastern melbourne type home and then resell that for 1.5 1.6 million dollars like six or seven people have done that this year and let's say it costs you 550k to build it there's at least 200 grand of equity and an opportunity like that immediately that's comparable in the market so again not everyone has that sort of money but some investors like to own a small number of bluetooth things rather than a high number of cash flow things yeah and how would you compare like north and south brisbane to each other yeah so what i noticed in terms of the major differences is north brisbane in the last three years has been on a pretty strong run as a result of the university being built and the train station opening up in the beach part of brisbane um a lot of speculation has gone into that area a lot of investors have come into that area because it's ended up on the hot spotting list of things like hotspotting.