Hi guys,
I’m new to the forums and hoping that I can gain some ‘insider’ knowledge.
Does anyone know much about Moranbah, a coal mining town south-west of Mackay, Qld (pop. 6500)? I have heard the rental yields are excellent, but I’m not sure about the risk in investing in a mining town (ie. mining towns have been known to disappear as quickly as they started). Does anyone own a property there? Have I missed the boat, or am I likely to still make good CG and +PC? I am considering building a new 4-br home there, as opposed to buying an established property.
Anyway, look forward to hearing from someone out there.
Thanks.
CazzHi Cazz,
I know what you mean about the risks of mining towns, but Mt Isa is still booming, with yields of over 9%, and it really depends how long the life of the mine is. I know a lot of Ed Burton and other investors bought into Moranbah three or four years ago and doubled their capital investment within a year or so. If the yield is still good and demand for rentals high, then it’s probably safe for a few years yet. You might find it expensive to build there though.hEY CAZZ67
I AM FROM MIDDLEMOUNT, ABOUT AN HOURS DRIVE FROM MORANBAH. I HAVE FAMILY THAT WORK IN THE MINES THERE AND THERE IS STILL ENOUGH COAL THERE FOR ANOTHER 30 YRS SO i WOULDNT BE SAYING THAT U HAVE MISSED THE BOAT.
I AM NOT AN EXPERT ON GIVING ADVICE ABOUT PROPERTY, JUST LETTTING YOU WHAT I HAVE HEARD
I WOULD SAY THAT IT WOULD BE A GOOD PLACE TO BUY AS THE MINERS GET PAID STACKS!! I KNOW A GUY WHO IS IN HIS 20’S WHO IS GETTING PAID OVER $100kCHEERS
Hi cazz67
Rental demand in Moranbah is still very strong. Leases being signed today average between $500 pw for a smaller 3 bed to $650pw for bigger 4 bed 2 storey bouses. Many of these are leased to companies associated with the mining industry, and in many cases the tenants contribute very little – one of ours pays $20pw!!
It is very difficult and expensive to get work done – most contractors will work for the mine first and private citizens second, so you have to factor that in. I would imagine that getting a house built would be more expensive than say in Mackay.
It is riskier buying in a mining town, and only you know what your acceptable level of risk is. We don’t view it as a long term investment, but feel comfortable being there a few more years yet. I have heard that there is enough coal for at least 15 yrs. Of course, other factors could force the mine to close.
I don’t know how long the high rents can be sustained. They have almost doubled in the last 18 months. There is new development happening, but it appears to be at least 2 years away from completion. Obvioulsy more housing stock will impact the rents, so if you can sign up a longer lease now, its worth considering (no help if the house isn’t built yet – and also not good if the rents do keep going up and you’re locked in for 3 years). Old shopping centre is being upgraded, and other insfrastruture works are planned I’ve heard.
Last time I checked Residex still thought there would be reasonable CG over the next 5 years compared with many other areas of QLD, but don’t expect to double your money in a year or two, like you would have if you bought a few years ago.
Hope this helps a little.
Wake
Thanks to those who have given me some valuable information so far.
I am mainly interested in the high rental returns, not necessarily the CG. Sounds like it may be easier to buy an established home, taking into account the expected high costs and time involved with building up there.
I am also looking at Clermont (not far from Moranbah). Does anyone have any thoughts on that town?
Cheers
Cazz
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