QLD Logan buying guide

Discussion in 'Where to Buy' started by seanbrissy, 6th Dec, 2015.

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  1. seanbrissy

    seanbrissy Well-Known Member

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    Of course :D
     
  2. RetireRich101

    RetireRich101 Well-Known Member

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    as a contribution to this thread, the corner 700m2 are the best buy IMO especially in the better suburbs of Logan and the house I shifted to one side, to allow another dwelling that can be strata titled and sold off separately. You also have the option to build a 70m2 annexed unit under one title so you don't need to pay the expensive infra fees...
    The new dwelling on corner lot does not make you feel it is a 'granny flat' with battle axe/rear access type of living, so yield isn't compromised..
    Logan Council is only council in QLD that allows to build 70m2 annexed unit( in some cases 100m2) that can be rented out. Other councils either deny or only accept very small size.
     
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  3. Dmarkw

    Dmarkw Well-Known Member

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    Sean, great summary, and agree with your comments about needing to time the market and that time to enter was 12 months ago. How high the current cycle pushes prices will most likely be dependent on rates and rental price growth - i.e. the premium in yeild over borrowing costs.

    Thought I would share this graph with Woodridge data from Pricefinder I put together a month or so back. This is sales of 3 bdrm houses, normal sales, blocks under 950 sqm since 1985. Shows the need to time the market, as there a significant pull-backs and sometimes extended periods before previous cycle highs are reached. The peak to trough corrections are notably larger if taken from quarterly data..
     

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  4. Hanso

    Hanso Active Member

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    Hey Sean, I've started looking in the area with the major focus being CF to offset my portfolio a little. How acheviabe is it to get around 7.5% yield? From my initial searches it looks as though a lot of the opportunities come from Reno's to create dual occ. Is there any suburbs you would recommend in front of the others for CF, in the OP you spoke about western suburbs for yield but are there any real standouts?
     
  5. seanbrissy

    seanbrissy Well-Known Member

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    Hi Hanso,

    7.5% + yield is certainly achievable in today's market. I'd be looking in Logan, Ipswich and Moreton Bay council regions. As far as renovations go, I'd be looking to spend as little as possible as this will be added to your base cost.
    I recently acquired 8% deal for a client, they are out there, you just need to know what to look for, and act quick as these properties are well sought after.

    Cheers
     
  6. big max

    big max Well-Known Member

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    Unless you were on a low income and looking for low cost family house why would you not buy either closer to Brisbane or Gold Coast for capital gains?
     
  7. JDP1

    JDP1 Well-Known Member

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    Correct.. This is an argument that's been floated by a few different posters on this forum...the main reason I'd suspect is yield.
     
  8. Dmarkw

    Dmarkw Well-Known Member

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    Capital gains can often be stronger in these areas (Logan) during the the upswings, however correct more rapidly and significantly in the downswings. That said Gold Coast can also have very significant boom bust cycles..

    Take Woodridge for example over the period from 2002-2009. The graph I posted earlier shows a 3.45 fold increase in median prices for 3bdrm houses over that 7 year period. I think you'd be hard pressed finding many suburbs that outperformed this in percentage terms in Brisbane over the period.

    In addition there's the strong cashflow. These markets only take off when there's a significant yeild premium over other markets.
     
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  9. RetireRich101

    RetireRich101 Well-Known Member

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    @JDP1, what's there in Carina Heights that Logan doesn't have in terms of capital growth, putting all arguments aside..
    I believe you purchased CH in 2012/2013 and a townhouse?
     
  10. JDP1

    JDP1 Well-Known Member

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    Incorrect..in 2012.. But anyway...
    What does it have that Logan does not ( not that I'm in anyway dissing logan)... Near neutral Cf yet 7-8% cagr plus 25 min by bus in peak hour to the cbd, significantly higher average tenant quality, higher stability of cg, less reliance on timing, amenities almost at doorstep..the list goes on...there are others on this forum who have also bought in and around the area and I'm sure have experienced similar...
    Not sure what you are trying to get at in this...but to me it would be similar to the old argument of inner vs outer...there are pros and cons to each.
     
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  11. HUGH72

    HUGH72 Well-Known Member

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    Little or no vacant flood free land.
    Nothing wrong with either area, Carina has performed quite well over the last couple of years. In the long term parts of it will most likely be rezoned medium density residental like neighbouring Cannon hill.
     
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  12. RetireRich101

    RetireRich101 Well-Known Member

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    sorry I edited the post before you could reply the year you bought CH.

    I was asking only for a healthy discussion capital growth as I believe over and over again your opinion suggest buyers invest in Logan purely for the yield and very little capital growth..."the main reason I'd suspect is yield."
     
  13. JDP1

    JDP1 Well-Known Member

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    Seanbrissy Said it best in his post..suggesting logan has a more consistent yield irrespective of IR and other external factors such as cyclical movements. Of course there can be cg- which his post also shows...and good CG at that... But the cg is volatile, has a shorter window than other less risk suburbs and hence timing becomes comes important for cg. As you correctly said in another post, it's like investing in high dividends penny shares..similar risk-return characteristics.
     
  14. Dmarkw

    Dmarkw Well-Known Member

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    I really don't see investing in these types as suburbs as anything like penny stocks - these suburbs provide solid cash flow allowing you to wait out periods of low growth. Penny stocks are generally cashburning companies with no earnings.

    When entering at these suburbs at the right time - where there is a significant yeild premium over interest rates and better suburbs - the risk profile is relatively low. Eventually the crowd will see value.. Enter later in the cycle when yeilds are being compressed relative to interest rates and the risk becomes higher.

    In the last cycle central Logan suburbs finished with a yeild of ~5%, similar to blue chip inner city Brisbane suburbs at the start of this cycle, and barely above interest rates. Rents initially kept pace with price increases and once rents Plateaued and yeilds compressed, the party ended. This cycle started with yeilds close to 7% and interest rates below 5% - this looked attractive and eventually the crowd moved in..

    Will be interesting to see how much rents go up in this cycle and how high this can take prices.
     
  15. RetireRich101

    RetireRich101 Well-Known Member

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    Here are some of the increase in the last 2 years.

    Logan Central
    2014 9%, 269k
    2015 13% 304k

    Woodridge
    2014 12% 268k
    2015 9%, 294k

    Kingston
    2014 10% 275k
    2015 10% 302k

    So its a about 20% increase in the last 2 years. Median is now 300k.

    me thinks 400k by end of 2017

    ( did I just see alot of people unsubscribed from this post :p)
     
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  16. seanbrissy

    seanbrissy Well-Known Member

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    I'll take a punt and call average annualized growth of 10% over the next 2 years 360k by 2017.

    @JDP1 Carina is a fantastic area for investment.
     
  17. Greyghost

    Greyghost Well-Known Member

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    Depends on what your strategy is...
    Who's to say that a CF area cannot provide both?
     
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  18. RetireRich101

    RetireRich101 Well-Known Member

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    I know nothing about Carina so nothing against the area. A quick look at median growth on house and units:
    Carina:
    increase 15% in the last 3 years,
    But a 60% increase over the last 10 years
    Logan Central:
    increase 20% in the last 3 years,
    But a 40-50% increase in the last 10 years.

    Yes, there are certain part of Logan are flooded, likewise there certain pockets in BCC close to the Brisbane river is flood proned.

    Yes, there are more vacant land in certain Logan suburbs pushing out Loganlea, Marsden, Crestmead direction. Like wise, BCC had zoned many LMR land. A quick look at BCC pdonline, say the LMR zoned ares in Carina Heights indicate there are certain fibro houses sitting on 600m2 in a LMR zoned, that is not yet developed. Going up or going out...another discussion on it's own

    Both suburbs are good and attract different type of buyers/investors. When SE QLD rise and booms, both BCC and LCC will rise. The future % capital growth is all fuzzy to me. But what is known today is when I do buy into Logan the yields are higher but that is just the icing ...

    Yes, higher maintenance bill possibly in these area. Likewise a townhouse in CH would also have a strata to bill that would bring the overall net yield down.

    I was just having difficulties accepting JDP1 opinion comment quoted below, while there is sufficient evidence that Logan performed well and may continue to do so in terms capital growth.
     
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  19. RetireRich101

    RetireRich101 Well-Known Member

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    calendar invite sent to hashtag#seanbrissy for #dec2017:p
     
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  20. RetireRich101

    RetireRich101 Well-Known Member

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    Poor old Beenleigh, sit right in the middle, 30km each way, will have no hope of CG if based on this theory...
     
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