Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Huge fan of your work. Very impressive!' - Scott Pape, The Barefoot Investor, Australia's #1 bestseller.

'Must-read, must-follow, one of the finest analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Business Insider.

'I've been investing 40 years yet still learn new concepts from Pete; one of the finest young commentators' - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts...most comprehensive analyst I follow in Oz' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

Saturday, 24 January 2015

Brisbane Apartments

No go zones for investors

As promised, the first of a series of posts to follow on where NOT to buy property investments in Brisbane.

Forecasting house BIS Shrapnel has predicted that Brisbane's housing market will experience capital growth of 17 percent over the next 3 years, a view widely shared by many experienced analysts.

As investors, of course, the basic idea is to select property types and locations which will experience growth which is stronger than the averages, and to supercharge returns by buying at the right price or undertaking a renovation.

There are, however, a number of locations which are set to see a glut of new medium- and high-rise apartments which we strongly recommend avoiding.

Invest in these locations and a sub-optimal result is all but assured, with some downside risks also inherent.

Let us commence then, with the most obvious of the lot - the Central Business District (CBD) itself.

While there is some demand for living in inner city Brisbane part of the time - including from people such as myself - there is certainly not this much demand...


No, that's not Hong Kong, it's Brisbane...right next to the Story Bridge.

What the CBD certainly does not need is another record-breaking tower block, the like of which has never to date been seen in Brisbane.

Below is a photo of the unassuming site at 222 Margaret Street - at the moment a mere empty block comprising a few shrubs - but soon to be the tallest residential tower Brisbane has ever seen, aka. the creatively named Brisbane SkyTower


Oversupply

An obvious oversupply of high-rise apartments will eventuate, many of which are constructed solely for the purpose of selling to investors in Asia rather than meeting a genuine existing demand from the rental market.

There are a number of other suburbs and locations which we see as equivalent risk areas and these will be covered on this blog in due course. 

What these photos do not adequately convey, however, is just how humid Brisbane is this Australia Day weekend. 

Strewth.