When our principal Anna Porter recently toured the country with Mark Bouris, one of the most frequently asked questions was around the opportunities and risks in QLD for investors. It seems that every second property investment firms are spruiking QLD at the moment.
We have a little bit of the footage from her insights on QLD and what to beware of and what the best opportunities are from the Melbourne presentation. Watch below and read on to find out more about what you need to know before investing in QLD.
It’s like the old saying goes, “when your taxi driver is giving you advice about the stock market, it is time to get out of the stock market”. Brisbane isn’t the only band wagon to be on, even if all the other buyers seem to think it is.
Almost overnight the Brisbane market has really heated up. It is SELLING OUT in record time! This week we called agents to view about 40 properties that were new listings, and within 24 hours all but 15 had SOLD!
This heightened demand and strong buyer sentiment is great news for our clients that we have been getting into the area for the past 18 months, as values are defiantly on the rise! But it does mean we need to respond accordingly and reassess for our current clients.
We certainly don’t want to be competing with investors that are paying premiums and in a buying frenzy. We are also monitoring closely how much of this heightened activity is investor driven, so that we can try to foresee any vacancy issues with the rental market if it become oversupplied.
What is driving the changes? Our thoughts are that it is being driven by the recent interest rate drop, coupled with the looming election that has a question mark over negative gearing. It seems this has spurred a lot of investors into action and most investors have Brisbane on their mind. Some buyers are buying off the internet and not even inspecting the property. MADNESS!
Rest assured though, we will not be paying overs for a property, and if we don’t feel it is a great property for the right price, we will not put it forward to a client to buy. We also want to ensure we are in markets with balanced renter to home owner ratios, to keep the rental vacancies down. The beauty of working with an investment firm like us is that we have many fantastic markets we are positioned to purchase in, we have all the research and knowledge at our fingertips and are agile enough to change locations as quickly as we need to, so that we can ensure our clients get the right investment. If the market changes, then so can we if it is a better outcome for our investors.
Is it time to jump off the bandwagon?
The answer is… not just yet but be cautious in that market and it could be time to jump very soon! When investing it is critical to stay in front of the growth and not slip behind it. It is also important to be in a market that is underpinned by growth drivers and not panic.
We are still buying in Brisbane but we are in locations that are much more underpinned by home buyers and the local market than interstate investors. This provides less chance of a spike in vacancy when the market is oversupplied with properties for rent, and also keeps an equilibrium in the market. Imagine what could happen with an interest rate rise in an area that is mostly underpinned by investors.
So we recommend anyone considering Brisbane to buy where the locals live! We also recommend you be VERY careful what you are paying for the property as there are some interstate buyers paying tens of thousands too much at the moment.
Most importantly, avoid the oversupplied areas that every investor is flocking to such as Ipswitch, Logan, Springfield Lakes, Doolandella and some pockets to the North as well. These ares are a HUGE concern and in the next few weeks we will be sending out a ‘not-spot report’ that shows you why these areas are a terrible investment and what you need to avoid. We will be releasing series of these ‘devils advocate reports’ on locations throughout the country, to help investors avoid a costly mistake. So stay tuned!
We also have some hidden little gem’s of locations that are the quiet achievers!