By Herron Todd White
Wandering around the Brisbane residential property scene with a lazy $500,000 to spend will get you some attention, but being slightly below our capital city median (which is somewhat close to $600,000), your choices in 2019 are more limited than they were a few years back.
That said, our market has been attracting new residents from Australia’s more expensive capitals in increasing numbers. We have so much to offer and $500,000 provides reasonable options for anyone who wants to take part but didn’t just sell their Sydney-based, tax-free home for loads of cash.
A great example of what you can jag at $500,000 in Brisbane is a basic, semi modern three-bedroom, one-bathroom house on a 400 to 600 square metre block in Hemmant, Tingalpa or Wynnum West.
For example, this home at 17 Toondah Place, Tingalpa was reported to have sold in May for $480,000. The property provides three bedrooms and a single bathroom on 580 square metres of land.
Attached housing in the mid-to-outer suburbs provides opportunity to spend your dough as well. A great example would be a modern threebedroom, two-bathroom townhouse in Manly West such as this one at 21/312 Manly Road which sold in May this year for $535,000.
If you want to be closer to town, another option would be a two-bedroom, two-bathroom unit in near-CBD suburbs where prices have taken a bit of a hammering in response to oversupply concerns. One recent example is 21/35 Dunmore Terrace, Auchenflower which sold for $489,000 in February this year. The unit offered a modern finish with two bedrooms, two bathrooms, and two-car accommodation in a medium-rise development.
Some other examples from around the traps include Keperra on the northside. In this suburb, lowset post war homes that are a little dated on the inside will fall just shy of $500,000 with something a little more polished being in the early to mid-$500,000s.
One great example is this property at 69 Annandale Street, Keperra which sold for $504,000 in May this year. Positioned on a 625 square metre lot, this renovated cottage offered three-bedroom, one-bathroom accommodation with ready access to retail and transport.
Other options can be limited. Inner-city areas such as Paddington, Ashgrove and Alderley don’t even have vacant 405 square metre lots below $500,000, while entry level at The Gap is in the mid-$500,000s – and that’s for something requiring a bit of work.
The Northgate and Nundah precinct will see some options in secondary locations, or for somewhat dated dwellings, around the $500,000 mark, but these are mostly knock-downs as entry level here is pushing closer to $550,000.
So, this is what your dollars will buy, but how wise is it to purchase at this price point in BrisVegas, and what are your best alternatives?
When it comes to detached housing, sticking with fundamentals of location will always serve you well in Brisbane. When tethered to the $500,000 price point, we suggest that staying as close to the CBD as possible in a well-serviced suburb would be a safe bet. A circa 2000 low-set, brick, three-bedroom, one-bathroom house in Hemmant would provide excellent capital growth prospects for example. You can also compromise on the age and condition of the home to keep the price down. Perhaps a highset post-war that needed some love would be a great under-$500,000 buy. After a bit of work, it’s likely to exceed the half-million mark in value. If cash flow was a priority, then a townhouse would have a higher rental return, however value is more likely to remain flat or go backwards.
While the majority of buyers at this mark will be local owner-occupiers, with many being first home buyers, there’s still plenty to attract investors. Those who pay circa $500,000 should expect rent between $400 and $450 per week for a detached house, while a townhouses can achieve $450 to $500 per week.
If you can find an elusive bargain in an area such as Kedron for $500,000 you’re doing well – they are becoming rarer, but still pop up from time to time. Geebung, Northgate or Virginia are also good investment locations as they offer easy access to highways and are close to major shopping outlets.
Banyo is another area worth considering with some cheaper properties on offer, although the style and condition of house may be a somewhat lesser standard. You really must think about compromises if you want to go much cheaper – such as living on a main road or thoroughfare or other secondary location.
All-in-all though, because this price point is in the lower half of the Brisbane house value spectrum, the potential for gains is good. When markets rise, it’s often the cheaper properties that are dragged up first.
We touched on units earlier as an option too. There are bargains to be had with this property type, but as a general observation, we’d suggest a cautious approach. Older conventional brick walk-up units in six or eight- pack style complexes can be purchased in the inner city for under $400,000, but don’t expect runaway value growth any time soon.
Finally, how did we go in last year’s lazy $500,000 report? Well, we were pretty spot on with our picks. Mostly, our market has been subdued, so we were suggesting much the same type of property last year as we have suggested this year. Dwelling values have shifted very slightly in a positive direction, whilst established units have probably decreased some.
It’s Brisbane after all, so stay conservative, stick to your knitting and you should do okay over the long term.
Speak with a Brisbane Mortgage Broker today.