Brisbane Investment PropertyEven investment property under $600,000, usually in strong demand, has shown weakness over the past 6 months. BHA recently concluded a search for a client looking for a Brisbane investment unit. We targeted the rapidly changing area of Bowen Hills, only 2.5 kilometres from the CBD, with good rental yields, and a mix of both established and new stock regularly coming to market.
One of the newest properties in the area is the Code building. We found a beautiful 9th floor 2-bedroom unit, bought off-the-plan for $534,000 and due to a change in circumstances offered for $480,000. This is certainly a reasonable discount at face value. But when benchmarked against similar existing properties that deliver close to 5% rental yields, not cheap enough. It would need to be priced at $440,000 or a good 25% less than it’s pre-completion purchase price to tempt an investor.
In time vendors will correctly price to the new market conditions. This will be the buyer’s great opportunity.Continue reading