Logan Highlight Report Q4 2011

Local Area Characteristics A city in transit

The Logan City Local Government Area is located approximately 15 and 50 kilometres south from the Brisbane CBD and borders the Brisbane LGA to the north and Gold Coast LGA to the south. The Logan City LGA is now the fifth largest city within Queensland. The amalgamation of Queensland LGAs in 2008 saw the region absorb parts of the Beaudesert and Gold Coast LGA, further expanding the region and solidifying itself as a key metropolitan centre.

Logan City is a growing residential area or a city in transit , with substantial rural, rural residential, commercial and industrial areas. Residentially, the area is made up of a diverse mix of dwellings to suit all budgets and lifestyles. The region encompasses a total land area of about 913 square kilometres. Rural areas are located mainly in south, west and eastern edges of the City.

Its central location between Queenslands largest municipalities (Brisbane and Surfers Paradise) has seen the area rapidly expand both demographically and economically over the past 10 years and coupled with is accessibility to the national highways and rail networks. Logan is set to become a major residential and employment hub as both Brisbane the Gold Coast continue to expand.

The population of Logan City as at June 2010, was 282,673 residents, equating to a growth of 5,113 (1.8 per cent) new residents from the previous year. With new town planning and further expansion of the urban footprint, the population of Logan is projected to double between now and 2031.

Future Development and Infrastructure
The Logan City precinct is located approximately 20 kilometres south of the Brisbane CBD. Through recent years Logan City has experienced significant radial growth prompted by the development of major transport corridors including the Beenleigh rail corridor and the Pacific and Logan Motorways. In order to further develop the region and ensure growth, continued upgrades to the Pacific Motorway are under construction or in the pipeline. Furthermore, there are also a number of significant social infrastructure developments designed to accommodate the future population growth .

The most significant projects under construction or proposed include;

Bethania Retail Precinct
Development of a new retail precinct to include supermarkets, shopping centre, arcades, retail markets at a estimated value of $30 million. Currently in rezoned, with a predicted construction start by June 2012.

South Gateway Upgrade and Eastern Busway Extension
The Gateway Motorway is to be realigned and extended, along with the South East Busway extension from Eight Mile Plains to Priestdale Road, at a cost of $96 million. Currently in the feasibility stage.

Greenbank Commercial Development Precinct
Construction has commenced for a precinct that will contain a supermarket, specialty shops, offices and medical centre, with completion estimated at 2012. This project will have a cost of $13 million.

Motorline City
Located in Daisy Hill, this $350 million development will incorporate a 25-storey residential tower, seven office buildings and a shopping centre. This project will be staged with the expected completion in 2016.

Logan Reserve Master Planned Community
In the concept stage, this community will provide 700 residential lots with a shopping centre. If the development will proceed, it will cost an estimated $30 million and construction could commence as early as June 2012.

Alma Park Zoo Relocation
The relocation of Alma Park Zoo from Dakabin to Loganholme is in the concept stage, looking to commence at the end of 2011, with an estimated cost of $25 million.

Logan LGA Overview
Over the past ten years, house sales have accounted for an average of 3,119 transactions per six month period . Settled transactions have softened consecutively from the June 2009 period, which saw record low interest rates and government incentives driving market activity. Over the most recent half year period, the Logan LGA recorded its lowest volume of house sales in the past decade, equating to 1,428 transactions. This level of sales represents an annual softening of 25 per cent.

When viewing the House Sales Cycle, it is determined that over the past decade the median price has steadily increased up to the year 2010. Since June 2010 the median price has experienced a slight softening of 3.9 per cent to close the first half of 2011 at $370,000. However, when looking longer term, the five year average growth rate was at 6.2 per cent per annum.

Analysis of the most active price points during the June 2011 half year shows 40 per cent of houses transacted within $300,000 to $399,999. This was followed by the $400,000 to $499,999 price point, which saw 24 per cent of total transactions. Over the June 2011 half year, the most significant tightening in sales activity occurred within the $400,000 to $499,999 market, which accounted for 24 per cent, a decrease of 2.3 per cent from the previous year. The premium end of the market at $800,000 plus accounted for 1.3 per cent of the total sales, which has remained steady over the past year.

PRDnationwide Research conducted a resale analysis on houses sold within the Logan LGA. To do this, all capital gains achieved from houses resold are averaged out to give an annual growth figure for the area. As displayed in the Average Annual Capital Growth graph, since the peak of the market in 2003, the average rate of capital growth has declined considerably. For the most recent six month period ending June 2011, sellers realised an average capital growth rate of 6.1 per cent, with an average holding period of nine years and one month.

When the Logan house market is analysed closer at the suburb level, it is concluded that Jimboomba experienced the largest amount of sales (80 sales), followed by Shailer Park (77), Rochedale South (74) and Marsden (70). The overall trend in sales activity appears to see a decrease in most localities from the previous year, with only a few suburbs experiencing an increase in sales. The suburb to experience the largest increase in transactions was Forestdale, with an increase of 57 per cent from the previous year, followed by Meadowbrook, with an increase of 40 per cent. The largest decline in activity occurred in Logan Central, with a fall of 66 per cent to register 15 sales.

According to the Australian Bureau of Statistics, detached dwellings account for 13 per cent of total dwellings within the Logan LGA. However, when looking at the total property market, unit sales have only averaged 9.8 per cent of total residential sales over the past five years. This equates to an average of 356 units sales per six month period, with the most recent June 2011 period registering 176 transactions.

Contrary to the house market, units have experienced substantial growth in the median price, with annual growth over the 12 month period ending June 2011 at 9.3 per cent. This level of growth is likely to be a result of the unit market being tightly held, which has resulted in rapid growth over the past decade. The median price achieved as at June 2011 was $315,000, only $55,000 less than the median price for houses. The majority of unit sales occurred within the $300,000 to $399,999 price bracket, with 42 per cent of the total sales. This was followed by the $200,000 to $299,999 bracket, with 24 per cent. Sellers who exited the unit market over the first half of 2011 realised an average capital gain of 4.2 per cent per annum, through an average holding period of six years and seven months.

There is currently an under supply of vacant land in the region which has resulted in a strong, positive median price growth within a tightly held market. Based on current household projections, the Department of Infrastructure and Planning has identified, residential land stock within the Logan LGA that could facilitate supply in the area for 12 to 21 years (depending on local growth). For the first half of 2011 only 217 vacant land sales were recorded, well below the five year average of 591 per six month period. This decline in activity has slowed growth in the median price, as for the 12 month period ending June 2011, no change was recorded, closing at $220,000. The average cost per square metre that transacted for vacant land over the first half of 2011 was $281, down from $313 per square metre recorded over the previous year.

Marsden Area Overview
Located along the Logan Motorway to the east of the Pacific Motorway is the greater Marsden Area, approximately 48 kilometres north of Surfers Paradise and 23 kilometres south of Brisbane. This region includes the suburbs of Marsden, Kingston, Loganlea and Waterford West.

The Marsden Area house market draws upon many similarities to the wider Logan LGA market, with declining levels of activity and an increasing median house price. Over the past five years house sales have averaged 343 per six month period, with the first half of 2011 experiencing 167 transactions. The Marsden Area House Sales Cycle displays a rapid rate of decline in activity from 2009, equating to 35 per cent per annum over the past two years. Over the first half of 2011 the majority of sales occurred within Marsden at 41.9 per cent of the total house sales, followed by Kingston at 21.6 per cent. The Marsden Area has experienced significant growth in the median price over the past five years, equating to seven per cent per annum. However, this has recently altered from the longer term trend, as for the first half of 2011 the median price closed at $306,000,equating to a decrease of three per cent over the 12 month period. The majority of sales occurred within the $300,000 to $399,999 price bracket, with 44 per cent, followed closely by the $200,000 to $299,999 bracket, with 43 per cent. When analysing the longer term trends of the brackets, it is determined that the segment to have diminished the most over the past four years was the $200,000 to $299,999 bracket, contracting by 81 per cent. Sellers who exited the market over the first half of 2011 received an average capital gain of 5.3 per cent per annum through an average holding period of nine years.

Vacant land sales have fluctuated in the Marsden Area due to the availability of land. Over the past five years, an average of 68 vacant land sales have been recorded per six month period, with the first half of 2011 registering 33 sales. The first half of 2011 registered a median vacant land price of $203,000, equating to a slight increase of 4.6 per cent from the previous year, with the longer term trend established at seven per cent per annum over the past five years. The majority of vacant land sales occurred within the suburb of Marsden, at 79 per cent of total sales. The average cost per square metre that transacted for vacant land over the first half of 2011 was $329, down from $352 per square metre recorded over the previous year.

Shailer Park Area Overview
The Shailer Park Area is located approximately 45 kilometres north of Surfers Paradise and 25 kilometres south of Brisbane. This Area includes the suburbs located on the east side of the Pacific Motorway of Shailer Park, Cornubia and Daisy Hill. Ideally situated, this region can be accessed from the Pacific Motorway and express rail services from Brisbane and the Gold Coast.

The Shailer Park house market can best be described as a reliable performer, with a consistent trend of an increasing median sale price. While there has been no change to the median price of $469,000over the 12 month period ending June 2011, the five year growth rate portrays the stable trend of five per cent growth per annum. Despite strengthening prices, activity has decreased considerably since 2009. An average of 239 house sales have been recorded per six month period over the past five years, with the first half of 2011 registering 149 sales. The majority of house sales occurred in the suburb of Shailer Park with 52 per cent, followed by Daisy Hill with 27 per cent. The majority of house sales occurred in the $400,000 to $499,999 price bracket, with 38 per cent of total sales. This was followed by the $300,000 to $399,999 price bracket with 21 per cent. Sellers who exited the market over the first half of 2011 received an average capital gain of seven per cent per annum through an average holding period of just over six years.

Vacant land sales in the Shailer Park Area have fluctuated over the past decade, ranging from as much as 75 to as little as 12 sales. Over the past five years, an average of 35 vacant land sales have been recorded per six month period, with the first half of 2011 registering 12 sales. As a result of the altering rate of sales, the median price has fluctuated significantly over the past five years, closing at $336,500 as of June 2011. This equates to a slight softening of 2.5 per cent from the previous year, with the longer term trend established at 6.1 per cent per annum over the past five years. The majority of vacant land sales occurred within the suburb of Daisy Hill, at 58 per cent of total sales, followed by Cornubia, with 25 per cent. The average cost per square metre that transacted for vacant land over the first half of 2011 was $249, down from $372 per square metre recorded over the previous year.

Beenleigh Area Overview
The Greater Beenleigh Area is located approximately 50 kilometres north of Surfers Paradise and 30 kilometres south of Brisbane. This region includes the suburbs of Beenleigh, Eagleby, Eden's Landing, Yatala, Mt Warren Park, and Windaroo. Ideally situated, this region can be accessed from the Pacific Motorway and express rail services from Brisbane and the Gold Coast. Housing product in the area comprises a variety of affordable options with older sections of Beenleigh featuring a variety of housing styles ranging from Queenslanders to rendered houses in the newer estates.

Since 2009 the Beenleigh Area has experienced a declining rate of sales, following the trend established by the greater South East Queensland region. Over the past five years an average 348 house sales have occurred per six month period, with the first half of 2011 experiencing only 156 sales. Through a subdued level of sales, the median price has stagnated over the past 12 month ending June 2011 to close at $333,250, a decrease from the previous year of 6.7 per cent. The majority of houses that sold over the first half of 2011 fell inside the $300,000 to $399,999 price bracket, with 50 per cent of the total sales. When looking longer term, sales below $300,000 have become increasingly scarce, accounting for only 31 per cent of total sales over the first half of 2011, down from 51 per cent in 2007. Sellers who exited the market over the first half of 2011 received an average capital gain of 5.1 per cent per annum through an average holding period of eight years and six months.

The Beenleigh Area unit has performed well over the past decade, with the median price increasing at 14.7 per cent per annum over five years. Over the first half of 2011 the median price closed at $315,000, a staggering 21.2 per cent increase from the previous year. The amount of unit sales per six month period has also remained fairly stable of this period, with approximately 64 unit sales occurring in the first half of 2011. The majority of unit sales occurred in the $300,000 to $349,999 price bracket, with 53 per cent of total sales. However, this was followed by the more affordable segment of $150,000 to $199,999, accounting for 16 per cent. Sellers who exited the unit market over the first half of 2011 received an average capital growth rate of 3.2 per cent per annum through an average holding period of just over seven years.