25 Sep A Brisbane suburb with low ratio of renters – Shannon Davis
The next Brisbane suburb we look at with Shannon Davis is in the south-east and is about 12 kilometers from the city. Belmont has a median price of $635,000 and as well as telling us why he has chosen this suburb, he also tells us about a great property there and why he likes it.
Kevin: Our special focus this week is we’re looking at some suburbs around the south-east Queensland market, specifically in Brisbane. As I said, in future shows, we’re going to be looking at the other markets around Australia, as well. But for today, the focus is on Brisbane.
My guest is Shannon Davis from Metropole Properties in Brisbane. They are buyer’s agents, and this is what they do. That’s why we gave them the mission of doing this for us, to identify the properties and the suburbs that they believe are going to accelerate in value.
The second area that you’ve looked at Shannon, is Belmont. Tell me a little bit about Belmont.
Shannon: Belmont, a tiny suburb. Only ten square kilometers. Not many units. It has a massive percentage of owner-occupiers. We’re talking 77.9% of owner-occupiers. Really tightly held.
Kevin: Just on that point, if I could ask you, the predominance of owner-occupiers, does that tell you something about the suburb and the quality of housing in the suburb?
Shannon: Yes, nice place to live. Also, renters and landlords are my competition. I’d rather have an element of scarcity there, so that every time my house becomes vacant, or every time I’m going to market, I’m going to be competing against less rather than more.
Kevin: It does mean, though, that you’re probably going to be paying slightly above the odds. You can always buy a lot cheaper, as you are going to see, as we go through the ones that we’ve identified, and even the median prices.
Shannon: Yes. But I also believe that it’s quality over quantity. I’d rather have two really good investment-grade properties rather than five average or mediocre ones. I think a lot of people beat their chest about how many properties they own, but are they worth it, and are they wealth-producing?
Kevin: So, Belmont, a pretty small area, ten square kilometers.
Shannon: Days on market is really low at 33. We mentioned the percentage of renters. Strong yields for houses at 4.4%. Again, it’s not got the level of discounting as some other suburbs and had a pretty good three-year growth period, as well.
Kevin: The growth in population’s quite strong in there, too, around 24%. Tell me that message that sends you?
Shannon: Again, it’s just not much land becoming there available there, but there is a nice place to live, and it’s grown its price really well, as well. We’re looking at a median price of about $635,000, so it’s still pretty affordable by Brisbane comparisons – and I’m talking about Brisbane City Council, in that area.
Kevin: In our previous segment, when we were talking about Mansfield, we mentioned that the discount there was negative 2.6%. Belmont’s is 7%. Does that indicate that the prices in there, the asking price, the differential, well obviously, it’s a little bit higher, so you’ve got a little bit more room to negotiate?
Shannon: Yes, definitely. But, again, negative 7% is quite low relatively to the other Brisbane suburbs where we are right now.
Kevin: A market in equilibrium – just so we get some balance in here – I believe is anything up to 10%. Anything over 10% is probably a touch on the high side. So, 7% is getting up there, but it’s not the highest.
Tell me about the property you chosen in Belmont and why you’ve chosen it.
Shannon: That one there, Kevin, it’s 13 Crestmead Place at Belmont. It’s being marketed by Purple Bricks. It’s a cul-de-sac position, but I think it’s getting pretty close towards land value there, and I think, with its cul-de-sac position, it might open itself up to a knockover. There’s no demolition control and we could build a contemporary house and manufacture some equity.
Kevin: Was the fact that is was listed with Purple Bricks any sort of an attraction, or what did that tell you about the property and the seller?
Shannon: I’m a big fan of selling agents being a big guide to how suburbs perform and how houses perform. And with Purple Bricks, I think I can take my chances a little bit more with some previous experience of negotiation.
Kevin: What do you mean?
Shannon: I think it’s more of a volume model – less attention to detail and you can probably get a better result for the buyer.
Kevin: Yeah, the business model for Purple Bricks, just to explain again, is that the owner of the property will actually pay a listing fee. So, it’s not a success fee. It’s not a selling fee. It’s a fee to list. It’s around about $4500, and whether or not you sell, you still pay that fee.
So, the quality of the agent is probably one of the determining factors. Is that what you’re leading to there?
Shannon: That’s what I was trying to say, yes, in fewer words.
Kevin: I thought it might be.
Shannon: But also, Kevin, it has a long lease, and I think marketing with a long lease is a real trap for investors because the majority of buyers are owner-occupiers, and when you have a long lease involved, it really cuts out a big chunk of your market.
Kevin: This is quite an interesting point that we’re making here because there is a long lease on this, and obviously, the agent concerned is marketing this on the fact that there is a long lease. But this is a property you’ve identified that could be quite a good knockdown.
Shannon: Yes. I think you wouldn’t be in any danger of over-capitalizing, given the prices of a contemporary. Often, it’s cheaper to build than it is to renovate, and I think Belmont will look after you with its demographics into the long term.
Kevin: So, what’s the price on this one?
Shannon: It’s offers around about the $560,000 mark.
Kevin: Yes. So, there’s a fair bit of room for negotiation in there, and given that it’s a knockdown, you’re effectively paying land value. Happy to talk to anyone who might be interested about this off air. We were not able to get the agent on this particular one, but an interesting property. 13 Crestmead Place at Belmont.
Belmont is the third property that we’re having a look at, as we look around Brisbane – look at the suburbs and the properties that we believe could grow in value.
My guest is Shannon Davis, and Shannon is from Metropole Properties. This is what they do. They are buyer’s agents, and they look around.
Coming up a little bit later in the show, we’re going to have a look at Everton Park, which is another great suburb with a median price of around $600,000. And the final area that we will look at in the show today, is a very strong part of the Brisbane market, with a median up in the $700,000s. We’ll talk to you about that a little bit later in the show.