Brisbane June 2017

The month in review: Brisbane

By Herron Todd White
June 2017

The idea of picking up a paintbrush and earning a little extra equity is something most Brisbane home owners aspire to. In more recent times, when detached housing in terrific locations has felt like it’s reaching beyond the abilities of many, renovation has offered a foothold into some of our city’s blue-chip addresses.

Brisbane has also always had a warm glow in its tool belt for a quintessentially state-named reason – the Queenslander. The timber-and-tin of our iconic homesteads makes them perfect for a reno project. Many were built way back in the early 1900s so they could probably do with a lick of paint or two.

The other thing about our Queenslanders, almost all are protected from demolition. These pre-war homes will be controlled by Traditional Character/ Heritage overlays and registration, and are restricted from demolition. This might legally force the hand of owners and investors to do the work, however the market for renovatable cottages is strong in our city regardless. Properties that are appropriately priced do make a nice project for those willing to take on the work.

These home appeal to a broad cross-section of buyers. Not only do aspirational types look to put in a few weekends as renovation warriors in order to make their living space a bit brighter for friends and family, there are those motivated purely by profit as well. Many have been trying their hand at the flip-fordollars approach to making a quid.

As often mentioned, Brisbane has a reasonably low buy-in price so if you can pick your market and your property well, there’s cash to be made. This sector is probably doing even better at the moment with a rise in demand for completed property in blue-chip family locales. Professional mums and dads with limited time on their hands will pay a premium to have a very nicely renovated home – and those project hunters looking to make extra dough will be quick to cater to this demand.

If you had to pick a position where it’s easiest to ensure you don’t overcapitalise, it’s those traditional near-city suburbs where stock is limited and prices are rising. If you find an entry-level Queenslander in your most desirable address, and the price is right, then they are definitely a goer.

But don’t miss the boat – there are capital gains already underway in a number of these locations and you want to be the first buying into the market, not the last. The key indicators of a successful location? Proximity to the CBD, established precincts/nodes and desirable school catchments are common variables at the top of buyers’ wish lists.

Travelling further away from the CBD will give you a lower purchase price-point, but you must be more careful about overcapitalisation in these addresses. There will be a ceiling to what you can achieve once you travel beyond the 5 kilometre to 8 kilometre ring. There are options to make a profit or create a gosh-darn wonderful home, but just check your fundamentals once more. Buy at the right price, be as close to facilities as possible.

Also, if you can create something special with your renovation, the better. Perhaps going up a level will give you a city-skyline view that will add additional value to the home.

Another consideration if you’re new to this market might be to look at older units. These are veritable bargains at present because the oversupply of new unit seems to have had a negative flow-on to cheaper second-hand stock as well. Once again, fundamentals are your friend. Find older units in close proximity of town and with good local transport and café facilities. The other great thing about renovating an old unit is that it usually isn’t expensive. A coat of paint, a spruce up of kitchen cabinetry, new carpets and some window treatments won’t cost the earth but can make a unit feel like a whole new abode.

So where should you look to buy for your next reno revolution? If you have the means we are going to steer you inner city. Keep an eye on those great localities where buyers will pay a premium for just the right home in great condition. Check out New Farm, Teneriffe, Paddington, Bulimba, Hawthorne, Norman Park and West End. Entry level pricing sits at between $700,000 and $1.1 million in these addresses. As to what a renovation might sell for, it’s hard to imagine because these are the areas where the upper limits of price get retested with each prestige sale. Finished renovations to an exceptional quality will attract big money in these markets.

With every piece of advice comes a warning. Renovators should steer clear of areas with limited demand at present. It might look like we’re stating the obvious, however this is where you’ll overcapitalise. Usually it’s fringe locations where there’s a lot of supply where you’ll find it hard to make dough on. They’re tempting because they’re cheap, but you have to do your homework on end values, or you might get burned.

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.