25 Apr The Brisbane magic – Darren Piper
We are seeing more and more evidence every day of just how varied the property market is. It’s not just one market, it’s several different markets. This week we talk to a Brisbane agent who remains positive about the Brisbane market in particular. We find out what is behind Darren Piper’s enthusiasm.
Kevin: Well there’s no doubt we’re seeing more and more evidence every day of just how varied the property market is. I guess we’ve always known that. We’ve said for many years that it’s not just one market, it’s several different markets. And Sydney and Melbourne, while they may be suffering a little bit, they’re still very popular. But then a lot of buyers would also be looking outside, so we’ll have a look at the Brisbane market. I’m talking now to Darren Piper from Universal Buyers Agents based in Brisbane.
Kevin: Darren, you remain very positive about the Brisbane market. What’s behind that enthusiasm?
Darren: Yeah, good question, Kevin. It’s really a number of things. A lot of it’s to do with demographic changing in certain pockets and sub-markets, infrastructure such as the airport upgrade, Howard Smith Wharves and a lot of job creation, especially inner city. But I think a lot of it is following the slowdown in Sydney and Melbourne. A lot of focus is now Brisbane and also from an affordability point of view.
Kevin: You cite in your release, your latest release that there are 68 suburbs that have reported growth far above the average level. Is that any particular corridor, or is it in different sectors over the city?
Darren: Yeah, it’s in completely different sectors over the city. We are seeing sub-markets, so to speak, move significantly. What we’re seeing first-hand, from a competition point of view, is that sort of 700 to a million price point is definitely where the most buyers are, and then there’s quite a significant jump to the sort of two mil plus range, and that’s where you’re still seeing multiple offer situations like we were six, 12 months ago frequently.
Kevin: Yeah, Louis Christopher, in his report, which has just been released, numbers, listing numbers in Brisbane continue to climb, 6.9% growth year on year, and even month on month it seems to be growing. Are you concerned about the levels of stock? ‘Cause as he points out, it’s stock that’s not selling. It’s taking longer days on market.
Darren: Not necessarily. The only, I guess, part of the market that we’re seeing, inverted commas, an oversupply, a bit of a glut still is the apartment market in the city. But from what we’re seeing is there’s really good buying opportunity in the inner city apartment market, if you know where to look, and that’s the key part with it.
Darren: Because it is going through a slight correction off the back of the construction boom in 2016. There’s a lot less cranes in the sky now. Brisbane City Council has appeared to tighten up on development applications, et cetera, so I think that part of the market is where you’re still seeing a slight oversupply. But as I said, we are noticing it start to go through a bit of a correction at the moment, which is good.
Kevin: So what are the pockets that are popular for apartment buyers? Are there any areas that they should be looking at?
Darren: Look, I’m a big fan of the likes of New Farm and Teneriffe still, from a proximity to the city point of view. I think when it comes to apartment buying, I always try to focus on smaller boutique complexes with low body corps.
Darren: I think off the back of that construction boom, the vast majority of the stock that has hit the open market is in very large complexes, high body corporates, and they’ve got all the bells and whistles from an amenities point of view. But you also pay for that as well, and that obviously eats into your return from an investment point of view.
Darren: So, 6, 10, 12 packs, late ’70s, early ’80s, existing stock is we’re seeing the best buying at the moment and I think you will see the best growth.
Kevin: In the housing market you’ve particularly focused on areas, budget areas around, you say, 530 to 600. You mentioned Keperra and Chermside West. Why have you chosen those areas?
Darren: Just from an affordability point of view and also location to city, amenities, major shopping centres, motorways. You can get that further south, but what we’re noticing with buyers is at that particular price point they’re wanting to buy north from an ease of access to the city. You don’t quite get the traffic that you do on the south side coming in, and that’s both investors and owner-occupiers really focusing on that north corridor of Brisbane as opposed to south.
Kevin: Yeah, middle ring, a little bit more expensive, around the 650 plus mark. You’ve highlighted Cannon Hill.
Darren: Yeah, so as far as the middle ring goes, Kedron, Tarragindi, Holland Park, that southern pocket, so Mount Gravatt East, Mount Gravatt, that’s where we’re seeing the most activity and that’s where a lot of the southern investors, predominantly Sydney, are purchasing at the moment too. I think a lot of that has to do with price points as well, and there’s also a flipping scene down there at the moment in some of those catchments and some great money to be made.
Darren: So that’s where we’re seeing, I guess, the most focused in the middle ring point of view. And then as you step into inner city it’s the New Farms, the Teneriffes, the Wilstons, the Paddingtons and the Hamiltons are still just powering ahead, as they always have, and I firmly believe that they will always continue to do so.
Kevin: As a buyer’s agent, I would imagine the majority of your clients are investors, people looking for investment properties. What are they specifically looking for? What is it that they request of you?
Darren: Yeah, good question. It really does depend on the client’s situation and circumstances, because it is very much case by case. If we’re talking out of area, so Melbourne and Sydney investors, the key driver seems to be the rental returns. Obviously down there you’re banking on the capital growth side of things, which we also focus on up here, but the big driver seems to be the returns ’cause they’re double if not triple in some cases up here from a cash flow point of view.
Darren: The local clients are more so capital growth-based, so looking to be able to manufacture equity in a property or flip it. It’s a different style of brief, generally speaking.
Kevin: So are they looking for renovators? You mentioned there about adding value. Are they looking at the prospect of flipping, or are they definitely looking at a buy and hold proposition?
Darren: It’s a bit of both from what we’re seeing. We’re definitely seeing a lot more of the buy and hold, but the focus of the people that we’re dealing with in Brisbane from an investment point of view is purchasing something that has potential upside. So not necessarily buying a turnkey townhouse or a turnkey unit where really your hands are tied from a flexibility point of view.
Darren: The buyers that we’re dealing with local at the those price points are really wanting to purchase something they can do a cosmetic renovation on, or a significant renovation on, or hold and move on down the track.
Kevin: Yeah, I guess the skill of being able to buy below market value, or even buying below intrinsic value, that requires a lot of skill.
Kevin: Given that you’ve mentioned in this interview that there’s a possibility of oversupply, particularly in the unit market, do you see some developers looking at having depressed stock coming on the market? Is that an opportunity?
Darren: Yeah, absolutely. Mate, you’re exactly right. We’re seeing that now in some cases. The apartment market, there’s just so much choice out there for the buyer, so you’ve really got to do your homework.
Darren: The perfect example, without naming the development, is you look at Newstead. There’s a development down there that mid construction boom, or sort of late 2016, had sold out while everything else was happening, and there’s a complex 200 metres up the road that was finished just prior to that and they still haven’t sold out.
Darren: So it really is about doing the correct homework, understanding who the developer is, what other projects they’ve built. It’s not all about price, it really isn’t. It’s about value at the end of the day, and they’re two very different things in a lot of cases.
Kevin: Good talking to you. Darren Piper from Universal Buyers Agents based in Brisbane.
Kevin: Darren, thanks for your time.
Darren: Thanks very much, Kevin. Appreciate it.