Investing in Logan, Brisbane – A suburb review

 

It’s been a while since our last suburb review and now that we’re back, we thought of putting the spotlight on a location that used to have a not-so great reputation but lately been garnering the interest of property investors.

We are talking about the large council area of Logan City and its group of suburbs located South of Brisbane, about 20 kilometres from Brisbane CBD.

In this suburb review we’ll take a look at Logan City and dissect the factors that had investors buzzing about the area in the past 6-12 months. Included in this report are:

We’re happy to review great suburbs but remember—not all recommended suburbs, property or investment strategy will always be right for everybody. It all boils down to one’s investment goals so remember to ask yourself: What is it that I want to achieve and what is my timeframe?

These questions will be your guide where and what type of property you should buy.

The Location

Logan map

(http://maps.google.com.au/, accessed 13/11/2014) 

The Demographics

As in our previous suburb reviews, we present foremost the demographics of the area. Your investment property is a product—therefore it is important to know whether your product will suit the needs of the people in the area. Knowing the location’s people, where they work, how they travel to work, etc. can help you decide whether the location is suited for your requirements and help you locate the type of property that has appeal to such demographics.

 

Marsden-censusPopulation

According to the 2011 Census data, Marsden had a population of 11,278., with median age of 27 years old.

Marital Status and Family Composition

The majority of people above 15 years old in Marsden were single (42%) followed closely by married people (41%). Families are composed of couples with children (47.8%), couple without children (25.4%) and one-parent family (25.1%).

Country of Birth

Most common residents in Marsden, next to Australians (65%) were from New Zealand (10.5%), England (2.7%) and Samoa (2.1%).

Marsden-occupationOccupation

People in Marsden mostly work in blue-collar occupations. Most common were Machinery Operators and Drivers, Labourers, Technicians and Trades Workers.

The top industry of employment is Road Freight Transport, Cafes and Restaurants, and Supermarkets and Grocery Stores.

Travel to Work 

In Marsden, as in the rest of Australia, the predominant method of transportation to work was by car as a driver or passenger. Only 6.5% use public transport.

Housing

Properties in Marsden are mostly separate houses (90.5%) with 3 bedrooms, followed by semi-detached, row or terrace house or townhouses. Around 43% of these properties were rented whilst 39% were owned with a mortgage.

The Numbers

Below is a table of statistics in key investment areas in Logan:

Logan-Numbers

One of the factors that work for the suburbs of Logan is its affordability considering it is a mere 19-kilometre drive from Brisbane CBD. One can pick up houses here on good sized land for under $300k.

The Facilities

Logan hospital and draft

Logan is well serviced by freeways, on a train line, had a university (Griffith University) and a Tafe, large hospital (316-bed Logan Hospital that’s undergoing expansion), major shopping centre (Hyperdome) and suburban shopping centres.

There’s also a draft of Logan City Planning Scheme, indicating area’s  plans to grow and develop over the coming years.

 

Sample Properties

The style of housing in the Logan suburbs includes older style high set weatherboard properties, low set brick and tile from the eighties as well as areas of newer properties and housing estates. Each of the suburbs has a main predominant style, usually based around the era it was built in.

Here are two examples of properties located in Marsden:

Logan-property-1

Style: Low set brick and tile, 2003 build, on 652m2 block
Features: 4 bedroom, 2 bathroom, 1 car
Asking Price $349,000
Purchased for: $336,500
Rental: $370pw
Key Points: Good land size, newer house, low maintenance, good depreciation, nice area
Estimated cashflow: Negative $60 per week at 100% LVR.  Customer purchased the property at 80% LVR which gave a cashflow of negative $8 per week.

Logan-property-2

Style: Low set brick and tile, 1992 build, on 660m2 block
Features: 3 bedroom, 1 bathroom, 1 car
Asking Price $289,000
Purchased for: $285,000
Rental: $330pw
Key Points: Good land size, was owner occupied, so very tidy and looked after.   Add value potential with cosmetic renovation down the track, budget priced.
Estimated cashflow: Negative $26 per week at 100% LVR. Positive $14pw if purchased at 80% LVR.

Summary

Logan is an example of an investment area that may have received thumbs down from investors  in the past but has turned the negative reputation around to become a buzzing area in the past 12 months.

It can be hit and miss when it comes to finding the right property in the right street so I’d recommend caution and an ‘on the ground’ approach or using a buyer’s agent. Buying ‘sight unseen’ here is risky. I’d also recommend getting a good property manager on board, this is the sort of area where you do want to really screen your tenants well and stay on top of any issues.   As long as you manage the purchase and the tenants well, this is a good spot currently for low budget investing with good potential.

If you want some assistance, you are welcome to contact Property Zest Buyer’s agency in Brisbane to assist!

 

Suburb review: Kawana Waters, QLD (plus case studies!)



(This is a cut-down version of the suburb review we wrote for the April-May 2014 issue of Property Wise magazine.)

When looking for a property investment location, two of the factors investors consider is the how attractive the area is for renters (do people want to live here?) and the potential for capital growth. Facilities, infrastructure and other projects are often key drivers of both the rental market and growth in an area. For this reason, Kawana Waters in Sunshine Coast is reaping the rewards brought by the construction of the Sunshine Coast Public University Hospital, the recent opening of the Sunshine Coast University Private Hospital, the planned expansion of the Maroochydore airport and the development of the Maroochydore city centre as a commercial and cultural city precinct.

Phew, that’s a lot of projects!

In this article we’ll take a detailed look at the suburbs of Kawana Waters from a demographic perspective.  We’ll look at the infrastructure and facilities based projects occurring in the area and we’ll look at the property investment opportunities available.

As always I love to recommend great suburbs but do so with a disclaimer – not every suburb or every property or even every investing strategy will be the right one for you.  So remember to look at your own investment goals first and ask yourself ‘what is it that I want to achieve and over what timeframe?’  Asking these questions first will help you to determine where and what you should be looking to buy.

The Location

Kawana-Waters-Map

Kawana Waters is actually a group of suburbs located to the Southern end of the Sunshine Coast between Mooloolaba and Caloundra and includes Minyama, Buddina, Parrearra, Warana, Bokarina, Wurtulla and Birtinya.  At around 94km from Brisbane the area is commutable and many do make the commute, however, this is certainly not a sleepy seaside town and all the facilities and services required are here.

The demographics

Screen Shot 2014-03-03 at 7.49.31 PMPopulation

  • Majority of Kawana’s residents belong to the 40-59 age bracket (nearly 27%). This is followed by the 20-39 age bracket (27.5%). Median age was 40 years.

Marital Status and Family Composition

  •  Half of people in Kawana aged 15 years and up were married whilst nearly 30% are single.
  • Couple family without children (45%) outnumbered those who have kids (38%). Of couple families, 17% were both employed full time whilst 20.9% had one partner employed full-time and the other working part-time.

Country of Birth

  •  Around 78% of people living in Kawana were born in Australia. Most common residents of the area were from England (5.5%), New Zealand (5.4%), South Africa, Scotland and Germany.

Occupation

The labour force in Kawana Statistical Local Areas is mostly comprised of professionals (18%), technicians and tades workers (16%), clerical and administrative workers (14.5%). Others are managers and sales workers.   The main industries of employment are education, food services, building and construction and hospitals.

Housing

  • Properties in Kawana are mostly standalone houses (76%) with 3 bedrooms; followed by 15.5% of semi-detached, row or terrace house/townhouse types of property then 7.7% units/apartments.
  • Most of these properties were owned (35%) whilst 32.6% were being rented. Around 29%, meanwhile, were owned with a mortgage

Mortgage and Rental Payments

The median weekly rent in Kawana Statistical Local Areas is $365, higher than that of the state average which is $300.   Median mortgage repayments were also higher at $2000 per month compared to that of state average of mortgage repayments in Queensland.

The Numbers

Let’s take a look at the numbers on the suburbs around Kawana Waters:

Kawana-Numbers-Units 

Kawana-Numbers-Houses

The Facilities

facilities 

  • Kawana Shoppingworld, located on the main arterial road that connects Mooloolaba to Caloundra, is a major shopping centre in the region
  •  The largest shopping centre of the region is the Sunshine Plaza at Maroochydore, located 10 minutes from Kawana
  •  Parks are sprawled around Kawana—there’s Stockland Park and Quad Park in Bokarina, Boardstone Park and Lake Kawana in Birtinya, Neisler Park and Espanade Park in Warana, and Lauri Hutchison Park in Wurtulla.
  • Other attractions and facilities include Kawana Aquatic Centre and skate park, Lake Kawana Community Centre.
  • Hospitals in the area includes Kawana Private Hospital in Birtinya and nearby health centres are Mooloolaba Medical Centre (3 kms), Caloundra Private Hospital . The Sunshine Coast Private Hospital is 11 kms away.  The new Sunshine Coast University Hospital opened with an initial capacity of 200 beds in November 2013.

The Projects

It’s clear to see this area is growing and contributing to the growth are three major projects: The new Sunshine Coast University Hospital (SCUH), the Sunshine Coast Airport expansion project, and the Maroochydore City Centre

 The Property

Kawana-Waters-Property

Given that we are dealing with quite a group of suburbs in this area, the property opportunities here are wide and varied.

Suburbs like Birtinya offer new style apartments and houses close to the hospital precinct and property investors are definitely being targeted by developers and investment companies promoting the benefits of investing in new apartments and new houses in this location.  There are a lot of ‘off the plan’ deals being promoted here as high cashflow and high depreciation opportunities.  There are some properties that have been built already and to be honest, sometimes, it’s hard to tell the difference!  (Hint: Look for the artist impressions images and the references in the advert to ‘soon to be built’ and the like!).

Of course, off the plan is not for everyone and there are many options for established housing, both new and old and in a variety of budgets in the various suburbs around Kawana Waters.  As always, it’s a matter of working out what your particular goals are for this property within your overarching investing strategy and then finding the property that will meet those goals.

My advice on established property is to look at property at or below the median value of a suburb when you are looking to invest.  I’d also stick with your ‘meat and potatoes’ style of property, unless your strategy is to get into high-end executive rentals.  I would rather own several meat and potatoes style properties of different types in different locations than to put all of my money into one prestigious property.  This is in line with that wise old investment principal of diversification.

The Case Studies

Given that the options here are quite varied, I’ve presented two investment options to consider as our case study properties.  The buy and hold newer style apartment close the hospital precinct and the older, established property on the beach side of Nicklin Way in Warana.  Let’s look at how the numbers play out.

1. New style apartment

Birtinya-Apt

Our first case study property is a newer style 2 bedroom apartment in Birtinya overlooking Lake Kawana.   The property is very close to the new health precinct and would suit an individual or professional couple working nearby.  The property is attractive and has a nice outdoor balcony.  This sort of property offers a pure buy and hold strategy with depreciation benefits.

Let’s take a look at the numbers (note that we have made some assumptions here including 100%LVR, interest rate 6%, marginal tax rate 38%):

Birtinya-Numbers

As a long term buy and hold the property sits at just over 5% yield. Being a newer style apartment there isn’t really any add value potential in it and there will be body corporate fees, however the depreciation benefits will assist with cashflow.  Overall it’s a passive buy and hold for capital growth.  The question is, will there be capital growth to justify this property as a good investment?

2. Established house

Wurtulla-House

This property is an established 1980’s brick 3 bedroom, 1 bathroom, double car garage property on the beach side of Nicklin Way in Wurtulla.  The property is in a great location being an easy walk to Currimundi

The property is on a decent 600m2 block with side access for a boat or trailer and is in original but neat and tidy condition.  The property could be easily rented as is but also offers some good potential to add value through some cosmetic renovation and even a conversion of the double garage into more living area or additional bedroom space.

Here’s our numbers based on 3 different scenarios (note that we have made several assumptions here, including 100% LVR, interest rate 6%, marginal tax rate 38%):

Wurtulla-Numbers

As a long term buy and hold the property sits at just over 5% yield, even without doing any work to the property.  With some minor cosmetic work, the yield improves to 5.7% and then if you were willing to do a full renovation on the property including converting the garage to a bedroom, ensuite and walk-in-robe then we see a dramatic improvement in yield, not to mention the increase in property value.  This investment is a more active investment if you choose to implement the add value strategy to manufacture some growth and increased yield.  The location also shows some promise for long-term organic capital growth.

Summary

The Sunshine Coast, like other coastal locations in Queensland did experience a slow down over recent years following earlier boom times.  Within the last twelve months, however, we’ve started to see the money flow back into this area and the current list of large scale infrastructure projects on the Sunshine Coast demonstrates the extent of population growth and development there is to come in the region.

With the large scale hospital precinct development, the airport expansion and city centre development around Maroochydore we are seeing favorable conditions for investors and the volume of sales throughout the coast is further evidencing that property is back on the coast.  There are many types of properties to look at, with houses and apartments, big and small, new and old.  The hardest question to answer for investors is which type of property should I be looking to buy to give me what I need in my portfolio?

Investing in Mackay, QLD: Three Suburbs to Look Into

 

Last time we gave you an overview of Mackay and the region’s profile—its people, economic drive, services and facilities as well as dwellings—that makes it a viable option for property investors.

In this post, we look into different suburbs of Mackay that have good investment potential. Now there are other areas in Mackay that are also viable investing spots depending on one’s strategy and goals but for this study, we narrowed down our search and came up with three locations that appeal to us—Andergrove, Mount Pleasant, and West Mackay. Read on as we dissect each area and present you with location analysis of these three Mackay suburbs.

Andergrove


Andergrove is a popular family suburb located very close to the centre of Mackay. Being a sought-after family suburb and one of the largest, Andergrove has very good facilities catering to families such as choice of schools and shopping centres. Types of houses here include weatherboard and cladding, brick style, and other family-style homes. Andergrove has good rental yield and low vacancy rates. Consider the numbers below:

Mount Pleasant


To Southwest of Andergrove is Mount Pleasant, once considered to be THE suburb to live in before all those new developments happened around the nearby area. Being an elevated area, some homes are built in certain spots that have fantastic views. Houses from the 70s abound but there are also new homes, particularly behind the Greenfields Shopping Centre. However, moving towards the centre of Mackay, most houses are older.

Streets in Mount Pleasant are well-kept. While most of the houses are old, there is still a gentrified feel to this suburb.

Mount Pleasant has good potential for renovation to manufacture some growth.

West Mackay

If you want a location near the centre of Mackay, West Mackay would be a great choice. It is close to the hospital and has primary and secondary schools.

Houses in West Mackay are a mix of weatherboard, cladding and brick. While some streets are nice, there are pockets here that are not that good. One can get a cheap house here but make sure it’s not on one of those not-so-good locations.

West Mackay would be a good area for a renovation project, given the actual properties here and some improvements that are starting to happen in this suburb.

If you are looking for a Mackay buyers agent, feel free to contact Karen at Property Zest for more information on investing in Mackay.

Property prospect: Kawana Waters and Surrounds

Sunshine Coast University Hospital - Aerial view of site

Aerial view of the hospital site at Kawana.

 

The construction of the Sunshine Coast University Hospital (SCUH) has been creating a lot of buzz and excitement not only among local businesses around the area but also within the property investing community.

Property enthusiasts know that investing near infrastructure is generally a good thing—and a hospital as big as SCUH is definitely infrastructure that you may want to take a look at in terms of investing. To give you an idea how huge this project is, during its construction starting 2013, there will be 2000 workers on site.

The site for the SCUH is a 20-hectare greenfields site located on the corner of Kawana Way and Lake Kawana Boulevard

Sunshine Coast University Hospital
View of the main entrance, through the outdoor room, from the bus transfer located on Eastern Boulevarde.

And once the hospital opens in late 2016, it will create jobs for 3500 people on a permanent basis. More than half of this figure will be recruited from out of the Sunshine Coast area to meet the skills required. We all know proximity to work is one factor people relocate so this SCUH project will create demand for residential and commercial developments around the area.

With the hospital’s construction and eventually when it starts operation in 2016, there will be lots of traffic around the area as the hospital is projected to be the largest employer on the Coast—lots of people coming in to look for accommodation and for a property investor, that means good rental prospects and potential for capital growth.

Where to invest

A lot of new constructions are being seen around the hospital precint area, particularly Birtinya Island where brand new housing starts ‘off the plan’ or buying before the house or apartment has been completed. Price range at the time of writing is within the $400-450k mark for a three-bedroom home. Meanwhile, there are one-bedder, executive-style apartments that cost around $300s, working upwards.

On the high-end areas are waterfront-style homes around the $800k+ mark.



Whether you are keen on buying brand new or prefer an already constructed or interested in buying ‘off the plan’, there are plenty of options to scout for in Birtinya Island.

Surrounding suburbs

Meanwhile, I see some good opportunity in the surrounding suburbs of Warana, Wurtulla and Bokarina, which are literally one kilometer away. These areas have old-style houses that can be had from $300k and has great potential for renovations and improvements to increase yield.

Median prices in these suburbs play at around the $400k mark give or take a bit either side and rental yields are around 5%.

Projections of capital growth are always just that—projections or speculation. However, opting for a bargain, older-style home in one of these suburbs, which is just a kilometer away, and doing renovation or improvement on it can increase yield. Doing it soon is a good idea, while the construction of the SCUH is on its earliest stage and prices are still relatively affordable.

Suburb in the Spotlight – Dysart QLD, 4745

Australian Property Investing - Suburb report

Dysart is a relatively young town approximately three hours drive (inland) from Mackay on Queensland’s central coast. Due to being young, it has many modern facilities such as an Olympic-sized pool, shopping mall, golf course and bowls club.
Dysart was built specifically to house nearby mining operations and has hence boomed in recent years.
Over 90% of Dysart’s dwellings are houses, with approximately 75% of these being rented.

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Median house price

The median house price in Dysart is $414,000.
Last year saw a very low growth in house prices however this year, house prices have started to lift again.

Rental yields

Dysart often appears in “best yields in Australia” lists because of its high 8.67% rental yield average.

Population

Different sources list Dysart’s population as between 4000 and 5000.
Information from the Broadside Shire Council indicates that Dysart’s population is sensitive to change, especially with changes in the mining industry. In 1997, the population decreased significantly (to 2500) but it has steadily grown since.

Vacancy rates

Vacancy rates are low, at 1.6%, and falling (from approximately 3.5% last year).

Location, Location, Location

We spoke with Vision Real Estate (their information can be found below) who stressed to us that Dysart is not a large town and that most streets had housing available for rent. Most renters are miners. The most desirable street in Dysart is Long Crescent, although most properties are owned by BMA (the major mining company) and it’s unlikely that many properties from Long Crescent will be for sale in the near future.
Regardless of this, most rental properties have extremely high rents – so much so that many people can no longer afford to live in Dysart.
Plans and prospects (infrastructure, future infrastructure, services)

BMA are reportedly building approximately 90 new houses in the Dysart area. Apart from this there are rumours of potential new small businesses but nothing major.

Verdict

Although the figures for Dysart are currently great, the population is very sensitive to the success of the mining industry. It may be wise to look for a town which has a wider variety of industry.

Keep an eye on this one – a new mine or second industry could spell boom times again!

Further Information

We’d like to thank Vision Real Estate for their assistance in compiling this report.

View the Domain.com.au suburb profile for Dysart.