Brisbane buyers are taking advantage of current market conditions, tailoring a superior fixation strategy that provides a substantial increase in equity, says expert.
The strategy is evident in some suburbs of Brisbane, where buyers can increase their capital by rebuilding homes, said Melinda Jennison, managing director of Streamline Property Buyers.
"It really is a case of destruction plus construction equals profit. When you run the numbers, tactics make sense, but location is crucial or else you'll be left behind", she declared.
Melinda said ideal locations are usually areas close to town where it's easy to tear down an existing house and build a new one.
"The suburb must also have a big price disparity between new and existing homes, gentrification, high demand from family buyers, and desirable attributes such as views," she said.
Wavell Heights is one of the suburbs where the rollover strategy is widely used. It is only nine kilometers from the central business district and is dominated by detached houses on generous subdivisions.
"Wavell Heights has a huge price disparity – the difference between the entry price and the exit price is significant because the end product is highly desired by the local shopping demographic," Jennison said .
Seven Hills is also a good suburb for the turnaround strategy, Jennison said. Located just five kilometers from the CBD, the suburb also has a significant price disparity, which allows for a significant increase in equity.
Gordon Park is another attractive option due to its proximity to infrastructure and services. He has a “parkland” lifestyle that could be very popular for family buyers, Jennison said. Other popular suburbs for property fins include Corinda, Alderley, and Tarragindi.
Jennison believes the flip-for-profit strategy makes sense as the competition for high-quality homes is getting tighter due to the decrease in the number of listings. This gives builders an advantage, as they can capture demand from executive level buyers who are picky about their homes and are unlikely to look into the existing pool of listings.
"We were seeing a strong net migration between states before the crisis. While this momentum has slowed down due to border restrictions, there is no doubt that once they are lifted, a large numbers of southerners will make Brisbane their new home, "she said.
Top suburbs:
menai
,
Mayfield
,
werribee
,
East Victoria Park
,
Mortdale
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