Unit prices in Logan drop most over quarter in Queensland: REIQ

Unit prices in Logan, Queensland, have dropped 15% over the last quarter despite a yearly rise of 10.9%, according the Real Estate Institute of Queensland.

The quarterly price drop was the biggest drop for any area in Queensland, according to REIQ statistics, though the yearly gain was the highest as well.

Local agents say the price fluctuations are due in part to developments in the area, but prices are down.

Agent John Ahern from John Ahern Real Estate Slacks Creek says prices have dropped by about 15%, but he says this drop has been over the last 12 months or more, rather than the last quarter.

“The peak of the market was in 2007, 2008 and 2009 and then prices started trending slightly downwards during 2010, and by 2011 and 2012 prices tended to drop a little further,” Ahern says.

“They’ve dropped about 15% from their peak over the last 18 months or so.”

He says the 11% rise in prices is likely due to new developments in the area.

“The trouble with statistics is you take a bunch of sales prices and unless you dig deep you don’t really know if there were some new developments in the area, which can bump up the median.”

“You might have brand-new two- and three-bedroom upmarket apartments which are being sold to interstate investors and possibly overseas, and that can move the average up. An established property in the area has not gone up in the last four years. It’s gone down.”

There have been a number of new developments coming to market recently.

Ahern says prices have likely bottomed out and are due to bounce back.

“It’s a mixture of people buying. We are getting investors coming back in because the prices have dipped. Some investors sold over the last few years, and we’re seeing an influx back into the market because the returns are so good.”

“You can rent around the $250, $260 mark and they’re being sold from $155,000 to $165,000 in that bracket."

He says there has a slight rush in buyers hoping to cash in on the first home owners' grant before new changes roll in.

Ahern recently sold unit 27 at 279 KIngston Road, Logan Central for close to $155,000 in a mortgagee possession sale.

REIQ chief Anton Kardash says winter is traditionally a low point in sales.

“We do know that the winter quarter is in fact historically the quitest time of year and there are a lot of variables that affect confidence,” Kardash says.

The REIQ notes the figures were more influenced by an increase in lower-price unit sales rather than any drop in values.

Agent Marian Grimsey from Professionals Logan Lifestyles Browns Plains and Marsden says prices are desperately down from two years ago.

“I just sold a block for $169,000 which originally went for $230,000.”

“I feel sorry for these people, the owners. It’s better for them to sell than to end up having the bank take it and them not getting anything.”

Grimsey says tighter lending conditions are pushing first home buyers into the unit market.

“They’re having to take another look at what they can borrow.”

Grimsey is selling unit 8 at 46 Monash Road, Loganlea for $289,000.

The median price for units and townhouses in Logan is currently at $262,500, according to RP Data.