(This is a shorter version of the suburb review we wrote for the June-July 2014 issue of Property Wise magazine.)
For many investors proximity to the CBD is a big factor in selecting an investment property. The issue that we face when trying to secure a property that is close to the CBD is higher pricing. One of the most attractive things about Brisbane for investors currently is its affordability in comparison to other major cities such as Melbourne and Sydney. Zillmere is a small suburb just 14 kilometres from Brisbane Central Business District. It’s an older suburb where the government built prefabricated houses here under the Housing Commission in the 1950s post World War II. These old houses still exist in the area and Zillmere has had a bit of patchy past, has made investors reluctant to invest here.
Over recent years, as pricing in neighbouring suburbs has increased, we have seen home owners, investors and developers moving into Zillmere. This has seen the suburb’s reputation of not being safe be diminished and regentrification of this area is well underway. Over the last few years as more families and educated, working couples have moved in to the suburb owing to these relatively cheaper houses, the space for anti-social elements to thrive has significantly gone down.
With good proximity to the CBD, affordability, new units, transport (including a train station), schools, shops and an ever-improving community, Zillmere is continuing to gain the interest of investors.
In this article we’ll take a quick look at Zillmere from a demographic, housing and facilities perspective as well as present a recent case study of two purchases we have made in this area.
Zillmere is located a mere 14 kilometers from Brisbane CBD, making it ideal for investment.
Zillmere is surrounded by the following suburbs: Aspley, Chermside, Fitzgibbon, Geebung and Taigum. Population in Zillmere saw growth of 8% from 7,481 in 2006 to 8,105 in 2011.
As the city expands and the demand for housing grows, the price of real estate will rise in the suburbs. Zillmere is already on the list of suburbs, which are expected to be high performers.
Next to location, the next important part in your due diligence in looking for a potential investment spot is knowing who lives in the area—where they work, how they travel to work, their family composition. Knowing the location’s demographics will help you decide which property caters to certain population type. Let’s take a look at Zillmere’s demographics.
Zillmere has a young population with majority of residents belong to the 25-29 years age group. Median age in Zillmere was 34 years.
Marital Status and Family Composition
In Zillmere, majority of residents aged 15 and above were single (41%). Around 37% were married and 14.9% were either divorced or separated. Of those couples, 38.9% were without children whilst 33.9% have children.
Most people employed in Zillmere worked in clerical and administrative jobs (17.8%). These were followed by professionals (16.9%), technicians and trades workers (14%), and labourers (12.6%).
Most properties in Zillmere are standalone houses (71.8%). Around 19% were semi-detached or townhouses. There are a high proportion of rental properties here with 47.8% compared to the state statistics of 33%.
Mortgage and Rental Payments
The median weekly rent in Zillmere is $365, higher than that of the state average, which is $300, though lower than many Brisbane suburbs. Median mortgage repayments were slightly higher at $1800 per month compared to that of state average of mortgage repayments in Queensland at $1850, but once again, lower than many Brisbane Suburbs. Having been a traditionally ‘blue collar’ area we are seeing a shift in Zillmere to more of a ‘white collar’ area over recent years.
Facilities and Infrastructure
Zillmere is conveniently connected Brisbane with its own railway station. It has a busy local shopping centre adjacent to the railway with four other shopping centers within a 5 kilometer radius. Zillmere also has good air connection, with the Brisbane Airport being only 15 minutes away. The Gold Coast and Sunshine Coast are also easily accessible via the Gateway Motorway.
Zillmere has a government school, the Zillmere State School established in 1877, as well as a parish school along with a number of churches. It boasts 2 football clubs, the North Star Football Club which plays in the Brisbane Premier League and Zillmere Eagles Australian Football Club.
The Brisbane City Council is planning extensive urban renewal of the public areas within the suburb. Chermside offers Zillmere residents access to two hospitals (Holy Spirit Northside Private Hospital and The Prince Charles Hospital) and Westfield Chermside, the largest shopping centre in all of Queensland, featuring all major retailers, restaurants, a 16-screen cinema complex and a 26-lane Hyperbowl Bowling Centre.
Major roads such as Gympie Road or Sandgate Road cut down the commuting time to Brisbane city to about 25 minutes.
A significant portion of Zillmere’s residential properties reside on land that is suitable for further development into units and townhouses and this has seen an influx of developers of recent years with many new apartment blocks.
The Case Studies
We have recently purchased two properties in Zillmere that are indicative of the types of opportunities you may see in this area and although the houses are very similar (right down to the exact same floorplan!) they contrast two different approaches. Our first property is a straight buy and hold property which has already been renovated and the second is a ‘renovator’s delight’!
Case Study 1: Buy and hold, already renovated
This property is a 3 bedroom, 1 bathroom, 1 car garage on 749m2, purchased earlier this year. The house had just been renovated and had a fantastic new kitchen, polished boards and was fully repainted internally. The buyers spent a little money on putting built in robes, ceiling fans and a new side fence on the property. The property was purchased for $412,000, approximately $7,000 was spent on the improvements and the property rented at $400 per week.
Case Study 2: Buy, renovate and hold
This property is a 3 bedroom, 1 bathroom, 1 carport on 635m2. In contrast to our first case study, this property was definitely a renovator’s delight in need of quite a bit of cosmetic work internally. The property was purchased for $360,000. The buyers allocated $40,000 for cosmetic renovations to be conducted by a licensed building company as they were located interstate. This project is currently underway and estimated rental at the end of the project is $400-$410 per week.
Here are the cashflow scenarios for these two case study properties:
Zillmere is a bit of a ‘rough diamond’. An older suburb with a housing commission background, it’s found itself in a perfect position in the present property climate in Brisbane. It’s relatively close to the Brisbane CBD at 14km. It’s well supported by transport including train and bus. It has major shopping facilities, hospital facilities and industry close by. Most of all, it has affordable housing on good sized blocks ripe for renovation and suits first home buyers and investors. At the time of writing, it is possible to buy at under $400k here – but for how much longer will this be the case?