Hi Shooshoo,

There is a lot of land on the market in Dalby, as well as 97 advertised rentals on realestate.com.au

Here’s the land sales for the previous years:
2008 = 195
2009 = 176
2010 = 145
2011 = 15 so far recorded

this would suggest that a large amount of new homes could be available, however just not on the market for rent due to this crisis. Im not saying that there are 200 homes available but even 100 homes for a town that size is a lot of properties to be available for rent.

Shooshoo i would be staying out of the Surat Basin. I really don’t think it is all it is cracked up to being. It is situations like this that you mentioned where investors take marketing firms at face value who are only trying to line their own pockets and never wanting repeat or referral business and they then come unstuck as they aren’t telling the purchaser that the only limit to the number of houses they will build in the area is how many they can sell.

I would be sticking to the Bowen basin still, chase stability, and longevity in your investment. Unless you can afford to potentially have a property that fluctuates in value all the time as well as run the risk that it may be empty in 5 years time then keep to some key areas. Places where long term work forces will stay for the lifestyle as well.

You need to think of the family model. If a town can sustain a family model, that is education (including further education), work & lifestyle, then the region will grow and prosper, especially in the next 10-20 years in QLD as south east QLD struggles to provide infrastructure, and a lot of the new jobs and government infrastructure moves to regional QLD. If areas can ONLY provide work, people don’t stay, and that makes for an unhealthy investment be it property or business.

Look for areas where large companies are going which indicates longevity. Companies as in Woolworths, Stocklands & Lend Lease etc. In Emerald there is a $120m woolworths shopping complex being constructed, this is their second supermarket in Emerald. Harvey Norman are going in etc. In Mackay, they are nearly doubling the main shopping complex (Canelands) from 39,000 sqm to 70,000 sqm including Myer. West Gladstone is having a new Woolworths complex being built at the front of a new estate. Amidst such an abysmal retail environment, these companies are investing there money in these areas. They conduct a more in depth due-diligence than any residential property investor ever will in my opinion. These companies don’t make money overnight, it takes them years before some of these stores will see profit, hence they are there for the long term and they are not there on a gamble.

Again, personally, I would not invest in the Surat Basin. Any company that is renting out furnished accommodation on a large scale is not there to stay. I am talking from years of experience investing in mining areas here, I am not saying any of this light heartedly.

What happens if your property all of a sudden sits empty in 4/5 years time, remember your not the only one thinking of investing in these areas. You may have had all the capital growth in the world in the short term but if it goes empty, you wont be able to sell it, your capital gain is gone and you are still paying interest on $400,000. Your leverage to borrow more has just been reduced significantly whilst you burn $30,000 cash every year on a vacant property.

Ultimately the choice is yours, however, I know where I’m putting my money in the years to come.

Hi Kat,

Thanks for following, its been great the amount of people that are contacting me for advice just from this! I didn’t expect such a following.

Investing anywhere you dont live can seem like a daunting task I agree, however if you have the right people around you to alleviate the pressures off you as the investor it can be a lot easier and fruitful. After years of successfully investing in mining regions as well as being in real estate sales, I found that most investors where going direct tot he agent and having the wool pulled over their eyes as they didn’t know the areas and trusted the agents advice even though the agent worked for the vendor! Through my years of developing relationships in the investing and construction industry I formed my own company where I source quality, new investment properties where I then assess them against my due-diligence on the region and make sure that they are a good investment. From there if I think they are good I have a large base of clients that come to me for quality investments and I put them forward to them with full cost analysis’ etc.

When a client buys through us we provide project management, it was a part of the business that I really wanted to implement to differentiate us from our competitors as many of them sell you a package and then leave you to deal with the builder. We inspect all of our properties for our clients regularly.

We don’t sell properties where we don’t invest personally, so we know they area and the market and we research its potentials and its pitfalls. Whereas many of our competitors have only been to the place they are selling once or twice, just proving that they don’t look after the daunting build process for their clients.

I hope this answers your question, feel free to ask away Kat

Regards,

Shooshoo,

Thanks for sharing that, re confirms what I have been saying and in fact doing which is great to know I am not alone as I get a lot of flack from people telling me I am crazy to sell and recommend outside of a capital city.

The best thing investors can do from this is to now educate themselves properly on what will provide long term stable growth amidst this boom. before everyone goes in awe of Roma’s CG, please realise that he is talking median sales price. A lot of new homes have been built in Roma over the last 6 years in Roma so the example of CG being 100% i think is a bit flawed, I do agree with the example of median sales prices being 100% however. In saying that, significant capital gains have still been made and no doubt better than most of QLD.

Emerald has always been great for me, ive been investing there for years! To me, Mackay and Emerald will do great out of this in the short, medium and long term for reasons that you will see explained in my coming blogs. Gladstone will experience growth in the short term however there are so many variables to consider, returns could be great buy buyer beware is all I say.

There seems to be some smaller towns along the way to watch also… I am still more comfortable with Emerald & Mackay currently hence why that is the only place I have invested and recommend to my clients. This may change as factors either change or are confirmed to me.

Thanks for sharing, that’s the stuff that should be on this thread!

Gladstone blog finally posted ( http://ppiqldtour.blogspot.com ), its a long read but well worth it I believe. It is too long to post here unfortunately and has a couple of graphs that are important to the summary.

In short I have touched on:
– Projects and their current status
– Construction workforce population graphs
– Current property market
– Potential property prices
– Potential Rents
– Risks
– Pro’s & Con’s

I hope this information is helpful, I will be posting on a lot more regions/towns so do follow. This type of information has not been analysed in this way before, well not that is readily available or unbiased anyway.

Feel free to leave comments on the blog, on here or for questions you are welcome to email and I will respond at my earliest convenience.

Many thanks

GLADSTONE CENTRAL QUEENSLAND…..

Okay here’s what I think of Gladstone… Prices are a bit everywhere at face value (realestate.com, agents etc) which is synonymous with many regional centers in QLD. However when you dig that bit deeper you can see the consistency.

There are a few areas of interest:

1. Barney point and South: I looked at two blocks there yesterday. One had just sold, it was approved for 4 x 3 bedroom units. It sold for 410k and still had 100k of headworks to pay! That’s nearly the same price I can buy a house block in other towns for which will receive great growth also. What greeted me immediately in Barney point was a group of locals drinking on the beach at 1pm! The council still own a lot of land obviously as they had commission housing in the area.

I think it’s a great place for High density units (a lot of it is classified as high density already) however for houses I think that people will continue out west in the newer estates with all the new services and shops etc. The only agent that said that the demographics are changing in Barney point is a guy who owns a house there. None the less, in the long term I think Barney point demographics could change.

2. CBD: There are a lot of 2 bedroom units in 4/5 story buildigns being constructed with high volumes of sales around the $450,000 mark furnished. Rental returns of approx $650- low $700 are the estimates for these new ones. There are many more approved sites for developments like these and another 4 in council currently at an advanced stage.

Western suburbs: this is where all the new estates are and are still going, a new woolworths is going right on the edge of town also. The shopping out there is good (approx 10 mins drive from CBD) however if you don’t work in the CBD you don’t need to come in to it all the time. New house and land starts at $500,000 however the standards of these homes are very poor in my opinion. It seems to be around the $550,000 range for a good package which is Val/ market value still. Many people who are spruikng the $500k packages are saying you are getting it for $50,000 less. You’re just getting $50,000 of less house and or land. A $550,000 house will achieve approx $650 per week rent currently, whilst furnishing it seems to be the way to go and achieving $800-$1000. Even up to $1200 if you want to get creative and spend another $50,000 – $ 70,000. some builders are really bad! Especially Vantage homes, they are terrible here and even the real estate agents here warn against them. I feel sorry for the people that have bought some homes based on hype, when they need to resell on the local market the agents don’t even like the house so what hope do they have to get the best return!

I am concerned about the construction workforce still. It has always been my concern and it still is to be honest. In 5 years many employees may not be here. CSG has a very large construction workforce and a significantly lower long term workforce. And the reality is that a lot of people here are a construction workforce. Gladstone has had many peaks and troughs in history as influxes of construction workforces has coke and gone. However, of course it has always gone up in the long term.
There is a lot more land coming on the market, there are currently 4 large unit sites (40+) for public comment with council. I don’t have a doubt they will all rent out. But in 5 years? I don’t know and I don’t think I trust it yet personally for a long term hold. Land has risen from $180,000 last year to $250-$280 currently. The main shortage or residential land is NOW. Which means that land prices could be at or near their ceiling.

The mining companies won’t currently rent a house that is older than 5 or 6 years. This is the first time I have seen this as it seems to be unique with the Coal Seam Gas industries. I was also interested in buying an old house and subdividing the block and battle axing. However with strict council zoning for smaller developments this seems harder than previously thought. In light of this, not all rents will soar, only new houses or units. Yes I am sure they will all go up, but it won’t be port headland where you buy a 3 bedroom dump and rent it out for $1000 +. this seems to only come with the new properties.

I had to come home (only 4.5hrs away) for a couple of days. and will be going back leaving at 5:30 tomorrow morning. A big blog will come on Saturday I will promise you all that. Along with photos and all!

The H&L packages i cannot get my head around, I guess like everywhere there are companies advertising them with prices all over the place however they differ by 100k here for the same size house pretty much. Gladstone has risen dramatically this year. However it seems more land will come onto the market by the end of the year and even more next year. There are a lot of subdivisions in council presently.

rent for a 550k house is approx $630-$650 per week

Hi Steve,

I love regional Qld, i have lived there before and there are just so many opportunities! My first question is are you after capital growth or rental yields? if you had to choose which one would it be? Also what is your time frame for holding a property are you thinking?