Disappointing Growth- Woodridge- Logan, QLD

Hi All,

I was a previous user of the somersoft forums and found them exceptional for advice and guidance.

I have a scenario I would like some impartial advice on.

In 2007, I bought a stand-alone house in Woodridge, Logan QLD for 258k. At the time, it appeared to be an area that was taking off in terms of growth.

I borrowed equity against this property in 2010 to fund the deposit for a PPR for myself and my husband. This brings the total mortgage amount to 304k (current).

Unfortunately, since then there has been a dip in prices, with the valuation being around the high 200's, very low 300's. So as you can see, I have made very little in terms of capital growth on this property. It is tenanted but has caused us no shortage of headaches with maintenance issues.

My question is: hold or sell? It seems to be doing very little in terms of growth, but I am loathe to sell at what would be either a loss or complete break even.

I have no idea what the area is forecasted for the foreseeable future, as I keep reading competing reports/information/advice.

Any advice would be appreciated...

 

Logan is in a bit of a pickle at the moment. I had a look on real estate . com and the area has over 838 houses for sale.

I think there is a bit of an oversupply in terms of new homes being built and sold.
Best best is to get three local agents and get them to advise you what your investment property is really worth at the moment.

 

That is about right. the market declined from 2010 till 2012 and has only just surpassed the last peak a year ago. I would hang on as it will still go up as all of south east queensland rises over the next few year.

 

'nuff said.

Woodridge..well pretty much Logan and Brisbane have done zip since 2007, only just starting to pick up in the last 6-24 months (depending on area).

Most of this forum are buying in QLD, and a large number of them in Logan, right now (at 2007 prices, I might add).

Maybe they know something

 

I'd hold

We've recently bought two properties that the vendors bought in 2007 , one at their purchase price and the other at a discount to what they paid for it .

There would be a queue of forumites who would be happy buy an IP in logan at 258 at the moment . If you do want to sell it , pm Steven Ryan . I know he has clients who are looking up there

Cliff

 

Burn it and collect the insurance.

 

Hold, your timing was poor buying at the previous market peak thats all. Its still grown 20% with possibly more to come this year.
Logan LGA has a population of around 300000 so I'm not sure if the number of listings is high, I don't own anything there but I would suggest it isn't and it has come down if anything.

 

mmmm

The reality is I just did a search for houses for sale in Woodridge on REA , without including surrounding suburbs and come up with 43 . I don't track those numbers , but I have been watching logan for over 15 years and that number looks low .

A search on sqm , free data . for properties for sale in 4114 shows that the number of properties for sale has been trending down since around 2011 / 2012 and in the last months the stock levels have been the lowest for over five years.

jpcashflow , that took me less than 5 mins to check out .....

As a professional working in the industry , shouldn't you be taking a bit more care when you're advising someone to sell a property or are you that blinkered in your opinion against Brisbane that you're not interested in considering facts ...?

BTW , I DON"T hold any properties in Logan , but have done so in the past for very nice profits

Cliff

 

too much CCTV nowdays ...

Cliff

 

Lots

 

Some Logan tenants would do this for you, no need to intervene.

Never ever be afraid to sell for a breakeven or small loss. Would you buy the same property again at current market value?

A much tighter credit environment, a massive new dwelling construction boom and not much employment on the horizon for the battler demographic (Logan FHB's). Remember that from 2011-2015 a mind-blowing amount of personal income was generated by CSG related construction, these areas had plenty of bread winners earning 150-180k PA who are now back in the real world and struggling to sustain a similar lifestyle on half the salary.

 

Dear tenant, you receive your bond back in full - just ensure that there is no house to inspect.

I didn't buy the property.

I doubt there has ever been many living in Woodridge earning that money unless they had 12 kids and 12 foster kids.

 

Apologies, the rest of the post was for the benefit of the OP.

I would have once been surprised too, then I worked in the Oil & Gas industry for a decade.

 

It sounds like you didnt overpay in 2007 but you bought at a rising market and then has fallen. And now recovering. The cycle wasnt a huge surprise however i think timing wise if you sold now is a pretty bad move. Almost a knee jerk reaction

 

Hold..it will do some growth this year with all boats rising with thw tide in seq.

However, it really depends on what else you can do with the money should you sell. If you think the proceeds of sale will get a hogher return elsewhere...then you might consider selling.

 

I may be biased seeing as I hold IP's in the Logan area, but the research I've done along with the tabs I keep on this area would suggest to me, that if I were in your shoes (and based on the numbers/info you provided), I'd be more inclined to hold than sell right now.

I'm not giving advice or anything; you need to do what is right for your circumstance - but if the place is at least neutrally geared; holding on for another 12 months to see what happens, wouldn't 'cost' you anything - other than opportunity time lost for further IP buys... But even in this respect, I ask you, with the muted and modest gains most markets are experiencing, combined with the selling costs including CGT, sales commission etc.; what market could you reinvest the reduced post-costs funds into, that will outperform in these coming turbulent 12 months, the wider SEQ region?

 

Depends on the quality of the original deal you bought back in 2007.

I would necessarily be saying woodridge Logan has not done anything, but first looking at the quality of your buy.
Was it the right type of property for the area
Did you overpay or not buy under mv
Etc

 

If were me, would wait 9 months.. To me "2016 is now or never time" and Logan + Brisbane will post significant gains in the next 6 months, or will just meander along with a few % gain, and future years will be slow. Either way, I would wait for your path to reveal itself.

If you get an easy 10% in the next 9 months, you can choose to break even and move on. Spring period should be best to sell in even mildly rising market. Or if it looks like things are stupidly hot, you might choose to wait another 6 months until the best returns are had.

If its underperformed last few years, and you're sick of it, likely this will continue into the future, so if it were me, that's a sell, just the question is when

But not that unusual, much of Brisbane has done very little in the last 8 years other than the last 9 months.

 

Thanks everyone, I appreciate all the feedback. At this stage we will hold and see what the market does over the coming year or two. If there is consistent growth we'd be happy to hold the property for the next few years. I'm feeling more optimistic based on your feedback about possible growth for the area.