Suburb spotlight: Logan investor activity surges

Logan City, situated between Brisbane and Gold Coast, is a region in Southeast Queensland. Traditionally, it has been popular amongst investors – but saw a decline in activity after the global financial crisis.

In recent months, buyer activity has picked up once again in Logan.

Australian Property Monitors' senior economist Dr Andrew Wilson says Logan is an “established market”.

“It is a value market, and appeals to people looking for value-orientated property,” he said.

He believes that as the local Brisbane economy strengthens, Logan will continue picking up as well.

Additionally, Dr Wilson notes that Logan is a “mini-hotspot” for investors, as it nets quite a high yield, and is close to major employment areas such as Brisbane.

However, he warns against investors who rush to purchase properties in Logan. 

“It’s always the ‘curse’ of the hotspot. By saying it’s a hotspot, there could be an overshoot of fundamentals. Gladstone was the flavour of the month, now the direction’s moving to Logan,” he said. 

“Investors should beware of the ‘hotspot’. What goes up quickly comes down quickly as well,” he added.

As Queensland enters the election pipeline next year, Dr Wilson expects to see an increase in infrastructure spending. He added that the Queensland economy is “positive” thanks to the resource and tourist sectors that appeal to the lifestyle market. 

“The Brisbane housing market has the most potential for upside compared to other capital markets through to 2014,” he said.

Ray White Shailer Park principal Keith Nicholson told Property Observer that the property market in Logan is “very strong” at the moment. 

“Although prices have not increased there has been a strong increase in buyer enquiry and transaction numbers have increased. The market is certainly stronger now than it was six to 12 months ago,” he said. 

While some have concerns about overshooting in the Logan property market, Nicholson believes this is not the case at present.

“I think four or five years ago this was a problem. However prices in the area have come back quite a bit since the peak in 2009. At present, prices in the area are still quite low in regards to historical levels, yet rents are quite high. Combine this with low vacancy rates and it is a great time to be investing in the area,” he said.

Nicholson added that activity in Logan has been the “strongest it has been for some time.” He believes it is a great area for investors and first homebuyers alike as there is a great range of properties available. 

He cites great infrastructure as a major pull factor for Logan, with “quality schools, shopping centres and public transport facilities being big positives.”

Its central location, between the Brisbane CBD and Gold Coast, is also a big plus.

Lester Drew, principal of Land and Home Realty Logan Central, agreed that the Logan City property market is doing well.

“Enquiries have picked up substantially one month prior to the Federal election, primarily from local and interstate investors,” he told Property Observer. 

Drew adds he has been seeing a lot of investor activity in Logan.

“Currently the majority of buyers are investors. I have just sold a block of six units that we listed for sale for $1,000,000. A client from Melbourne paid the  sking price – and another investor in Sydney signed a back up contract for the full asking price. The property settled on Thursday to the first buyer,” he said. 

He believes Logan City’s location is ideal as it is host to large areas of industrial land that is attracting companies who need larger premises at affordable rates. 

“They can take advantage of both the M1, Gateway and Logan Motorways to avoid traffic congestion in Brisbane CBD,” he said.

Additionally, Logan is seeing a vacancy rate of below 2%, according to Drew. He notes that this puts upward pressure on rent returns, while most properties still fall under the affordable range.

Drew thinks the next year will be a great time for Logan as the Logan City Council has recently approved a number of locations that are regarded as Transport Nodes for redevelopment.

“These plans are currently with the State Government for Gazettal. This is an exciting development as it will mean that many of the existing Department of Housing homes will be released for sale – creating desperately required land for unit development,” he said. 

As Logan City encompasses a number of suburbs, Drew recommends keeping an eye on Logan Central, Loganlea and Loganholme for two reasons - one is public transport, and the other is the upgrade of facilities by the Council in these areas.

Nicholson also chose Loganholme as an up-and-coming area. He singled out Tanah Merah and Daisy Hill as areas to watch, too.

“You can buy some good quality investment properties that will offer good returns and should see some good capital growth over the next few years,” he said.

According to the latest RP Data report, the median house price in Logan Central is $240,000, down 3.8% on last year. The average discount required to sell a house is 8.4%, while private treaty sales average 75 days on market.

Median asking rent for houses is $320 per week, while gross rental yield is 6.9%.

The median sale price for units in Logan Central is $163,250, up 5.3% on last year. The average discount required to sell a unit is 8.7%, while private treaty sales average 63 days on market.

The median asking rent for units is $255 per week, while gross rental yield currently stands at 8.1%.

According to the latest RP Data report, the median house price in Loganlea is $285,780, down 6.3% on last year. The average discount required to sell a house is 8.9%, while private treaty sales average 88 days on market.

The median asking rent for a house is $330 per week, while gross rental yield is 6%.

The median unit price in Loganlea is $300,804, down 4.3% on last year. The median asking rent is $280 per week, while gross rental yield currently stands at 4.8%. 

According to the latest RP Data report, the median house price in Loganholme is $355,500, up 2.7% on last year. The average discount required to sell a house is 5.9%, while private treaty sales average 88 days on market.

The median asking rent for a house is $360 per week, while gross rental yield is 5.3%.

The median sale price for a unit in Loganholme is $325,000, down 5.2% on last year. The median asking rent for a unit is $340 per week, while gross rental yield currently stands at 5.6%.

According to the latest RP Data report, the median sale price for a house in Daisy Hill is $385,500, down .2% on last year. The average discount required to sell a house in Daisy Hill is 6.1%, while private treaty sales average 71 days on market.

The median asking rent for houses in Daisy Hill is $400 per week, while gross rental yield is 5.4%.

The median sale price for units is $270,000, down 6.6% on last year. The median asking rent for units is $350 per week, while gross rental yield currently stands at 6.7%.