Brisbane: Mediocre Growth, Low Confidence, Beware Logan ...

Discussion in 'Property Market Economics' started by pugstar205, 21st Oct, 2015.

Join Australia's most dynamic and respected property investment community
  1. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    Yes, very true. It's also more doable financially, whereas in syd in order to get into the desirable suburbs will mean you have to be a millionaire.
     
  2. Michael_X

    Michael_X Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    333
    Location:
    Gold Coast/Sydney
    Being on the ground every weekend in Logan, I can say the past 3-4 weeks has been a bit quieter with the interest rate rise. Last Wednesday, 5 mid week auctions were all passed in and now seeing reductions of $20,000 to $30,000 from asking price. Prior to this, the market was quite hot.

    7% yielders are still out there but harder to come by, still see 1-2 of these come across my desk each week but it's different to 6-12 months ago where it didn't take much effort to find them. Now you need to add a bit of value to get those rental returns.

    Starting to see low set brick 3/1/1 selling for $300,000 in Logan and I remember posting 3 months ago there were around $270,000 so that's another 10% in a few months.

    Also starting to see investors move away from the Logan hub of Kingston, Woodridge and Logan Central to target other suburbs further south - better opportunities.

    Cheers,
    Michael
     
    Biz, Greyghost and bob shovel like this.
  3. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,935
    Location:
    Lower Blue Mountains
  4. Greyghost

    Greyghost Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    1,635
    Location:
    Brisbane
    One of my fundamentals is once you know what area you are wanting to buy in is: what property type is the most desired/attracts the most rent etc.

    So even though there may be a slowdown in markets and become stagnant
    Exactly......
    Each major city has it's own cycle. I totally disagree what pugstar has said.
    Sydney has already peaked and it has had a flow on effect to bris, with Sydney buyers buying site unseen offering overs..

    I was never expecting double digit growth in my bris IP's. Why would we expect that? It's simply buying at the right point in the cycle....
    If it does a historical average over the past 25 years I'll still be happy.
    My yields are strong, even with potential int rate rises in future years..

    Correct bris may not have the drivers syd or melb has, but as I said, it's about the cycle..
     
    Biz likes this.
  5. Michael_X

    Michael_X Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    333
    Location:
    Gold Coast/Sydney
    Haha, sorry. I will stop talking about Logan :)
     
  6. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    The price differential and future growth potential byway of where brisbane is in its cycle still make it an attractive proposition to Sydney investors, despite the rate increase.
     
  7. Justin_Z

    Justin_Z Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    594
    Location:
    Sydney | Servicing Australia wide
    Bought house in 2014 for cashflow with some steady CG potential- wasn't expecting double digit growth. Had a look just then-

    [​IMG]
     
  8. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,626
    Location:
    At work
     
    bob shovel likes this.
  9. pugstar205

    pugstar205 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    110
    Location:
    Brisbane
    I'm sceptical of all charts and graphs. It's easy to find the right graph to fit your narrative. In less than 10 seconds I found the information below which says that Marsden grew 13.5% over 3 years and 4.56% last year. The average weekly rental is the same as yours - $370 per week. Average income for Marsden residents $653 per week.

    It's interesting how your chart shows 1% in 2010, -4% in 2011, -6% in 2012, 1% in 2013, and 1% in 2014. ...then suddenly 10% in 2015. There could be something that's skewed the result - or sheer volume of Sydney investors fighting over eachother to own a slice of Logan.

    I'm not saying my data is better than yours (it's not), I'm saying that its easy to find data that supports your position. If I owned property in Marsden, I'd be quoting 10% as well.

    Marsden, QLD 4132 - Suburb Profile
    Marsden is a suburb located in the Logan City local government area of Logan City, Queensland. Marsden has a population of 11279 residents, with an average income of $653. The median price for houses is $328,561 and the median price for units is $250,445. House prices in Marsden have grown by 13.51% in the past 3 years and 4.56% last year. The average house in Marsden is rented for $370 per week and returns a rental return of 5.68%. The median weekly rental price on units is $335 and the rental return is 7.29%. Houses in Marsden take an average of 112 days before selling and the average time for a unit to sell is 112 days. There were 187 houses sold last year and 13 units sold last year in Marsden.
     
  10. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Investard county
    @pugstar205 , no offence but I have seen your type on the forum many times over the years. You sit on the side line never putting any skin in the market pontificating about how prices are not rising, will never rise, can't be true, not happening, waiting for the perfect shade of green etc...

    There are always deals to be done in a down market, rising market or boom market. I've been saying for a while that the Brisbane market has already risen quite a bit over the last couple of years, it is still rising and will rise for a couple more. Big boom, probably not imo but if you are looking to buy atm it's probably the safest best in the Aussie market.
     
    Darren A, fols and bob shovel like this.
  11. Northy85

    Northy85 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    444
    Location:
    Brisbane
    Yea for sure, they can buy a house in the best suburb in Brisbane for the price of an Eastern Suburb 2 beder unit. But the investors from Sydney are targeting the Logan area and will keep on doing so until the yields drop.
     
    RetireRich101 likes this.
  12. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Investard county
    There are Sydney investors all over the place in Brisbane. Not just Logan.

    If yields drop in Logan it will be because prices have risen. You might get a year or two of higher vacancy rates as the markets steadies but that is it. The population in the Logan area is expected to rise by 200k over the next 20 years, most of the usable land is further out so where are all these people going to live? Under the M1?
     
  13. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,935
    Location:
    Lower Blue Mountains
    You can look at the "data" (which lags!) or you can follow the changing asking prices and actual sale prices!

    I'm with Sir @Biz on this one

    I should quote myself more often :p
     
  14. pugstar205

    pugstar205 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    110
    Location:
    Brisbane
    Definitely no offence taken. I actually took 'my type’ as a compliment.

    I posted this thread because it provides an interesting counter position to the popular opinion on Brisbane / Logan (especially on PC). I didn't write the article on the YIP link – I just posted it.

    I’m not actually on the sideline. I’m out there every weekend viewing property, making offers, and undertaking DD etc. I’ve had 2 offers on contracts in the past 3 weeks (one still on the table). I’m in this to secure my financial future, and to invest to my own financial capacity / risk profile etc – not to copy others, own the most properties or hold the most debt.

    The property location / features I’m looking for a hard to find in one package, so I’m doing the hard yards, driving my preferred locations each week, talking to a lot of agents, getting a lot of offers rejected, making a few compromises and biding my time. I’ve got my strategy other people have theirs. Mine doesn’t involve holding 10 properties.

    My message to fellow forum readers is simply “buyer beware” (do your own DD and satisfy yourselves before jumping in, especially into markets like Logan). If that has come across as though I’m talking down property investment or Brisbane as a market, then I’m saying now that it wasn’t my intention. I'm just communicating what I'm personally seeing on the ground.
     
    nyc1, Whitecat, mcarthur and 5 others like this.
  15. Bastiat

    Bastiat Member

    Joined:
    14th Aug, 2015
    Posts:
    9
    Location:
    Melbourne (but don't want to be)
    Some people seem to be offended by cautious investors (these people have a vested interest in hyping the market). I think it will be a buyers market early next year once a bit more pessimism exists about the economy then maybe time to move.....
     
    Whitecat, S1mon and pugstar205 like this.
  16. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Investard county
    We're not offended at all. We've just been around the block a few times making a dollar here and there. We know what to look for, when to charge and when to pull our horns in.
     
    HUGH72 likes this.
  17. Northy85

    Northy85 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    444
    Location:
    Brisbane
    This is what I was getting at with price rises and stifling yields. With the extra people coming Logan City council will have to change the zoning to limit the urban sprawl. Springwood is already becoming a pretty good CBD.
     
  18. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    15,606
    Location:
    Sydney
    Absolutely correct...the question is what happens when this buying stops....look what is happening to the Druie?

    I saw this last time also...units in Kingston were selling for 80k..jumped to 180k....they dropped to 125-140 again before going up.
     
    Northy85 likes this.
  19. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,517
    Location:
    Investard county
    Possibly but this is some way off and a bit unpredictable. The new planning scheme was just released earlier this year so can't see them rezoning much for some time.
     
    RetireRich101 and Northy85 like this.
  20. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World
    I have a very different view, I would not be buying if I could not achieve double digit growth that is the point of jumping into a rising market, boom cycles are short 2-4 years. When you are buying there are also many expenses, one major expense is stamp duty.

    MTR:)
     

Price Accounting provide investor + developer tax services world and Australia wide for your property and all tax issues. Contact Paul@PFI below for our new client pack and quoted pricing + client portal access. Trusts, Co and SMSF are our specialty.