31 Dec Low Budget Property: David Hyne Tells us Where You Can Buy A House For Under $500k
In this week’s episode of the Rentvesting Podcast, we’ve got David Hyne, director at Herron Todd White National Valuers.
David’s company Herron Todd White has valued over $85 Billion in property every year across Australia, so we’ve got access to heaps of great data.
In this episode:
- David Hyne is a Director of Herron Todd White National Valuers
- He is based in Brisbane so we speak about the local Brisbane market, things to look for, indicators on when to spot growth, and how to look at markets and find the next hotspot.
- Where you can buy houses and properties under $500k.
- We then talk about buying property off the plan, and the difference between investor stock, compared to owner-occupied stock.
- It’s something you might not have heard of and could be buying a property that is affected by its resale. Lastly, we close off on the next 3-5 years.
I’m a property valuer and started out in rural valuation, but I’ve been here in Brisbane for the last 17 years, in the residential space and development. Herron Todd White is a national firm and has been operating for about 50 years.
Tell us about the Brisbane market? What are some of the green shoots you’re seeing around Brisbane?
The cycle of Brisbane and where we’ve been, in contrast to the southern cities, we had a bottoming out in 2011. But if we look at the last five years from 2012 to now, we’ve had median growth in about 20% compared to Sydney’s 80% and Melbourne’s 60%. We’re the poor cousin in this last cycle. But we’ve seen activity slowly increase over the past years and it’s at or slightly above long term average. The key market driver is affordability which is above average, interstate migration, we’ve seen it bottom and kick in all the graphs. The other one we look at is confidence, most of those graphs are showing something at or slightly below long term average.
Again, we’re playing poor cousin to Sydney or Melbourne and we haven’t had the growth cycle southern cities have had, but fundamentally the market is in a sound position.
Looking forward, the next 12 months to five years how does it compare to Sydney and Melbourne?
Short to medium term, so 3 – 5 years, I’d like to think it’s Brisbane’s turn in the growth cycle in that period. As interstate migration takes a hold a bit more, if we look historically at things, it’s a key driver. The price of real estate in those southern cities has been a catalyst in the past. With that, prices will pick up.
One preface to that is that it comes down to – if different properties perform differently, it probably would be more on the house and land.
Where are you seeing activity in Brisbane?
Every other cycle started this way and this one is no different. It’s always the inner city areas, you’d attribute the near city areas to have about 35% of growth and outer at 5%, certainly house and land in these areas has started to move. It hasn’t impacted yet on properties 25 – 30kms out, they’ve seen limited growth but eventually it does make its way there. Brisbane inner city areas aren’t overheated but they’ve performed at about 5 – 6% per annum.
Having lived in Brisbane, the apartment oversupply is area focused. Do you think its fair for people to take a broad brush approach? Or what do you see?
That is a good point, take it one step further, a lot of commentary on the property market is way too general.
If we talk about Brisbane we talk about suburbs and types of properties. Even in the one city, we talk about property classes.
Either get good advice or school yourself.
Yes, there are pockets of oversupply, but one step on from that is when people talk about investing in units – often people underestimate the type of unit invested in. As an investor in units, location goes hand in hand, a close second is the design of the unit and whether that appeals to the local market. So picking out something that appeals to that audience is important.
It’s true you see developers that are making investor stock, what are some telltale signs you’d see? How can you protect yourself from investor stock to owner occupied?
First the location, non-local investors get sold on the location to the city. In Brisbane, we’ve got areas like Bowen Hills and Fortitude Valley that are close to the city, but from my perspective, they’re not as good to buy in. They don’t have the local infrastructures like coffee shops that are popular for unit dwellers. So knowing where the local market is in terms of that is important.
Secondly, when we talk about the design aspect, this is what separates those two markets. We’ve got examples where the properties are in good locations but simple things like bedrooms where the size is so small you can’t even fit a queen bed. That’s impacting the fact that we’ve got a softer rental market, so when they go to sell, those people are walking in and straight back out.
If you’re an interstate investor in Sydney with a budget of $500k, what could you buy for that?
You’re certainly in the house and land market in Brisbane, but realistically in the 15-20km from the city as a starting point. In terms of capital growth, get as big of parcel of land as you can as close to the city. There’s nothing wrong with starting in Sydney for your research, look at what’s going – sold and being purchased.
Any particular areas or suburbs?
Here on the north side of Brisbane is my preference, Everton Park, the older timber style post war housing. Realistically you’re probably going to Keperra, Albany Creek, Chermside too, which all have reasonable infrastructure. There are no big developments there so there’s reasonable rental.
I know you help people with pre-buying reports, so how can people get in touch with you?
We love to help, so check out our website www.htw.com.au or Google us.
- There are areas in Brisbane you can buy for under $500,000, like Keperra or Albany Creek, it’s about finding the next suburb along. Look on maps and do research to get to know the area.
- Xkms from the city doesn’t mean it’s a good location, just because you’re within 5kms doesn’t mean the property you’re buying has the same amenities or public transport so get familiar with the local area.