Dizzy, 

Have you thought of NRAS? 

Further to this, Actions like these I believe should be likened to the past. Mining companies dislike labor governments and unions. Always, prior to an election will the magnify every pressure that the governments put on them in order to reduce them for the long run. 7 years ago the coal price was never even above $50 per ton, now it's slumped and sitting at $91 and the companies are saying they can't make money. This has been a result of government pressures and costs and the large companies will do whatever is possible to see that any government who threatens their viability is ousted.

There needs to be some serious belt tightening occur. Apart from the Australian Dollar, most of the cost factors could be managed to make coal mining a more viable option. One of the main problems is that the mining giants want everything to go full speed ahead while commodity prices are high as they want to get as much out of the ground as quickly as possible. However when prices come down, they are now exposed because they have been so flippant with costs and at the same time the governments have tried to wide the wave and increase red tape, taxes and fees. All to get to a point where all of a sudden we cant make money from $91 per ton when only 7 years ago we were profitable at $50. 

Its greed from everyone that has made this get out of hand and for the longevity of the industry in this country it needs to managed.

of course, just my opinion 

Lee, best to see my thoughts via my blog for help on this subject. It has been topical for quite some time now

I am told there are some good pay rises in the new negotiations however still some unfavorable terms for the unions at this stage. it will be interesting to see the official outcome and resolution.

On another note, we finally have seen NRAS stock in Emerald. With a proposed market rent of $600 or so per week for the houses, this could be great for many middle income tenants in Emerald having access to new houses for $450 or so per week while the landlord receives approximately $190 per week tax free into heir pocket on top of this. 

I believe this is a great aspect for a town like Emerald and will help keep many of the non mine workers in the town and help sustain and create diversity within the hub that it already is.

Hi Aviator77

You are correct about Emerald. Rents have subdued from the $900/$950 per week they were earlier on in the year. Whilst that was an amazing rental yield, there were several factors causing it to be that high as you could imagine. Emerald is a market that is not immune to seasonal fluctuations. Whilst it is not a "one trick pony" where if one mine changes its employment pattern it severely affects the rent, it still has fluctuations. Just not as severe as the smaller towns.

As you are aware, BMA are still in negotiations with the unions. Whilst this is still occurring after nearly 2 years, they are not renewing third party contracts with suppliers. This is having a general affect across the entire Bowen Basin and Emerald is feeling some of the effects of this. 

It is also important to understand the size of Emerald, with a population just under 18,000 people, it is not hard to have fluctuations that go up or down. The rents on a 4 bedroom house went from $650 per week to $800, then to $900 all within a few months. Now they are back to $700 or se per week. Whilst many investors would see this as the market coming off, arguably, they should not have got to $900 so easily. This was due to a combination of a number of contractors needing urgent accommodation in the town at the start of the year, along with very little vacant land being released last year. This really caused a bottleneck and caused companies to offer ridiculous amounts for rent. So rather than looking at the market unexpectedly coming down, I would say it is the other way around. Look at the market going unexpectedly up for a short period! 

The underlying fundamentals for growth of Emerald are some of the best you will get in the country. As an ever growing hub for the Basins surrounding it, new shopping and lifestyle activities, new land estates being released etc, it is growing to become an ever more sustainable community right in the middle of Qld.  As a 5 – 10 year investment, the outlook is absolutely amazing for the town. 

Times like these are unfortunately inevitable and it is also unfortunate to see the sales market increase as it does based purely on investor speculation of rents increasing. It does damage to a small town like this. Investors follow each other too much and wont wait for the right opportunities. They always come. I cant say how many clients didn't want to wait for the packages we had available and jumped in to inflated priced stock purely based on a short term outlook on rental yields. If you take a long term view on your investments, then it shouldn't matter that you wait until the best opportunity arises. I have to say, I am still to hear a positive story from an investor that got in with the hype! These are long term markets.

In answer to your question, yes we do have quite a few more opportunities becoming available both now and in the long term  and some of them are very good opportunities at that which is even more exciting. For years, emeralds rental yield at capital value has been 7 – 7.5%. This is sustainable and good for the community. with different housing sizes and types, this means that rents can be anywhere from $450 per week. Allowing a diverse range of people to live in the town and for it to operate sustainably. If you take the view that your investment in Emerald will be positively geared yet sustainable along with a very healthy growth rate over the years, it is undoubtedly a great place to invest.

Whilst this forum is not here for advertising, you are welcome to email me to assess opportunities. 

Hi Everyone,

Now that everyone should start recovering from the headache of end of financial year (I hope you all had a depreciation schedule!), I’ve updated my blog (see link below) with some comments about the widely publicised view of the mining boom being over.

Again, just my thoughts. I hope you all like it.

Thanks again for everyone’s continued support and for all of your recommendations to your friends about our company. We have had some great success in delivering some amazing investment properties and outcomes to those that used our brokerage services last financial year. We look forward to doing to all again, even better we hope!

Cheers,

Hi DanniK

Mackay is a great place to invest, however land prices have gone up considerably over the last 7 months which has seen H&L’s go up a bit overall, its time to shop for good value in Mackay, not just take any property as a good investment. The land sounds on value to me however as a stand alone block, I would say it is too small. The house package does not sound good value however, last week we put together a 450sqm block in Beaconsfield with a 190+ sqm house full rendered brick, full air-conditioning, and turn key for tenants (4x2x2) for $469,000. The land was $200,000. So the house was as much as yours yet bigger and probable better inclusions being rendered brick?

Contact me if you want more details on my email address below.

Have a great day!