Fabulous spots that will grow

Margaret is the founder and director of Destiny Financial Solutions and the author of nine books on property.

It’s critical that before you invest your money anywhere you learn as much as you can about how to invest well to protect yourself from mistakes – and from spruikers, whose best interests are not with you! And so my first piece of advice is to get hold of a few good books and learn how to recognise the growth drivers necessary to result in a growing property. While you’re saving, you can also be gaining a great education.

When you buy your own home, it is an asset free of capital gains tax. Therefore the necessity to see a good gain over time is not quite as paramount as it would be if you were an investor who is likely to lose around 25% of any gain to tax. When you sell the property to trade up, you are able to take all of the profit you make and either invest it in the next property or use it somewhere else. And so, rather than simply focusing on the best areas for growth, which may or may not be where you would be prepared to live, you must consider buying a place that provides you with that balance between obtaining a good lifestyle for your own needs and getting a property that will grow to enable you to upgrade at some stage in the future.

In Brisbane you have rightly identified that the apartment market carries some danger. In addition to increased supply in the pipeline, much of the stock is of a lower quality and I predict that there will be many issues in the future around building sustainability. So your money will be better placed in a freestanding house in an area that can provide community and amenity and cater for a good lifestyle.

You have said that you want to buy within 10km of the CBD but limiting yourself to this is not necessary. It’s simply not true that property within 10km of a CBD performs best – in fact, at times the reverse can be true and in Brisbane such property has already grown to the point where the best period of capital gain may be behind it for the foreseeable future. If you extend out to 15km there are some fabulous suburbs that have the growth drivers of major transport infrastructure upgrades, gentrifying communities, improving household incomes and a strong family demographic. These areas should be the next ones to move in the growth stakes, and with $450,000 you should be able to buy in quite easily.

Think Chermside, Zillmere and Banyo and you should be able to pick up something in your price range that doesn’t need too much work. Zillmere in particular also offers large blocks which, down the track, could have a second dwelling added to allow you to also get into the investment space with what would amount to a free block of land.