- Matt007 wrote:interesting comments given who they came from and the level of research etc they put in before spending money.
On another note, there's a lot happening in Ayr these days with development approvals for new homes (500 homesites) and industrial.. spill off from Townsville and Bowen… but that little 'ville is getting on the map.Matt there are approvals all over the area for new home sites in the Whitsunday region but developers are not acting on them as they are having difficulty moving.
I do a mass of work for developers and honestly 90% of them are only completing what has been started that is costing them.
Many developers have DA's ready to go but holding off on outlaying because of fear.
I know of a good dozen big developments recently shelved and it's a little worrying to be honest.
There seems to be unnecessary level of fear in the community created by bad reporting, I just hope some one starts to make the first move.I was just recently watching this report regarding this fear by Michael Yardney
Watch "Doom & Gloom Michael Yardney"HI Bob, I tend to agree.. the media and to an extent government have a lot to answer for where the current moods are concerned. No one seems to be looking too closely at the underlying fundamentals, which when you get down to it, are actually quite good. Frankly I think it's irresponsible but hey what do I know.. I tend to think many are watching the ripple rather than the tide..after all nothing sells like misery eh?
On another note I know a lot of developers projects are sitting still also because they can't get finance from Aussie lenders. that's why there are a number of o/s funds now broaching the AU market, and doing very well. They're not being stupid about it, quite the contrary, I tend to think the Big 4 and their minions will be kicking their own asses which I have to say will be fun sport to watch
.The media is doing more damage then good , I was just reading about the Aussie dollar dropping down to .45 cents by mid next year , so they predict.
No one is willing to make a move at the moment , all waiting to see what happens.
If no one is willing to make the move of coarse some thing will happen and it will not be positive.
Despite record low land sales, prices have steadied and there are early signs of a recovery in the residential property market, property developer Mirvac and the Urban Development Institute of Australia stated.
UDIA chief executive Debra Goostrey said she is confident that sales activity will improve during 2009."The combination of the First Home Owners Grant and the significant rate cuts seems to have lifted consumer confidence, especially the first home buyers," said Mrs Goostrey.
That being said I just lost out on two sale contracts this week because the banks were now asking bigger deposits from the two first home buyers I had interested in property.
Not only am I frustrated I have two properties sitting idle the first home buyers are shattered as they had their hearts set on purchasing.Double post
Hi bob, sorry to hear about that mate, I can only imagine how frustrating it must be for you and the folks buying, or trying to buy, houses. Agree with all of what you say above..i'm frustrated because I believe in teh fundamentals of our economy, and while it's a bit dire for some, its not all as bad as its being made out to be. Of course compared to record highs and boom times a fall seems bad.. we've taken a right cross big time!! But we'll recover, get our hands back up, and keep punching and keep going forwards. It may take some time but we'll get there.
Anyway.. good luck Bob i'll keep some good wishes coming your way!
Cheers
Matt10% yields are back and 250bn projects and infrastructure planned in mining towns. I know where im buying next!!
alani wrote:10% yields are back and 250bn projects and infrastructure planned in mining towns. I know where im buying next!!Do you really still believe the Bowen Basin coal industry is the place to buy right now…..
I've been posting on this forum since August that things might be on their way down.
I still think there's better things to do with your investment money right now.The latest news that I have heard:
McArthur Coal just got rid of all their contractors and also cut staff by 25% at Copabella and Morvale. Xstrata has just closed and suspended mining at Oaky No 1. All contractors there gone, and they are trying to relocate staff, and offering other redundancies. Rio Tinto to announce within the next 2 weeks their intentions. 14,000 jobs to go worldwide, and the guys at Kestrel tell me today that they expect around 1800 or 2000 of those will be in Australia.BMA haven’t done anything yet, but apparently it’s mainly coking coal exports that have been hit hardest.Xstrata set to make more announcements late next week or early the following week. Oaky North and Oaky Creek Surface are still operating
alani wrote:10% yields are back and 250bn projects and infrastructure planned in mining towns. I know where im buying next!!Hahahaha, go there alani and buy as much properties as you can, you will be doing some people a favour.
I can smell that you have invested heavily on those death towns and you will find much more pain soon. Copper and coal prices just drop today to 5 year lows and they will keep dropping even further, I am sure more and more mines will close and that will lead to ghost towns being left behind. But you know there are people that like to live in ghosts towns so good luck.
clones
I wouldn't be too quick to sound the death knoll on the resources boom just yet. It is worth keeping an eye on. A savvy investor might just be able to make a lot of money out of this down turn.
Clones I wouldn't be wiping off all the mines just yet, yes the price of commodities have dropped, but the cost to mining companies to run there mines have also drop as they get paid in USD for there product and they pay there contractors and employees in AUD and the AUD has drop by 40% the last couple of months.
China and India are still in need of our commodities and will be for years to come and with other countries been hit a lot hard than Australia, there mines are more likely to close before ours, therefore causing shorter supply of commodities, so the price will rise back up.My friends and i own 6 properties in the Bowen Basin between us.
5 of these have been signed up for 2 year leases in the last 2 weeks by major companies.
Yes, we had to negotiate lower rental agreements then what we expected. We rented them all for between $900 and $1200 a week. Considering that the purchase price for most of our properties was below $350,000 – we are still very happy with the result.
We had no trouble at all getting tenants – probably because we were prepared to take lower more realistic rents.
Yes, I am a little worried about the state of our economy, but this has certainly eased the pressure for now :- )
slightly off topic – can anyone recommend a pre purchase building inspector in the Blackwater area?
The agent is being quite unhelpful with no recommendations.
thanks
RLHi RedLeaves,
I think you'd need to find someone from Emerald or Rockhampton – there should be plenty to choose from as they are large towns. Wherever there is some competition, the inspectors are usually good enough. Ask if they provide photographs in their report.
I've recommended an inspector previously in this post, but he's based in Mackay and I doubt he'd go as far as Blackwater.
Cheers
Daedalus.
Hi Daedalus
I have just found your post and followed the thread and it appears the last comments were made around October 2008. I am interested to hear any comments you or others may have regarding the recent downturn in the economy, particularly our coal exports and the effects this may have on owning an investment property in the Bowen Basin and more specifically Moranbah. It is hard as an investor in the area not to feel a little exposed when the mining companies start to lay off employees.
There has been some capital growth in the last 6 months and rents have definately risen however there has also been an increase in homes for sale as listed on realestate.com which could be investors deciding to cash out before the tide turns or residents taking advantage of the higher prices to sell older homes and build newer ones. I would like to buy a second property in the area due to the high yield however whilst most factors are pointing towards growth the thought of a sudden decline in growth and or yield in the near future due to the world economy has me sitting on the fence.
Looking forward to any comments
Cheers Maggi
Hi Maggi,
Maggi wrote:Hi Daedalus
…
It is hard as an investor in the area not to feel a little exposed when the mining companies start to lay off employees.I agree it's hard not to feel a little exposed with the news of layoffs, however my contacts in the area tell me it's not as bad as the news makes out. A lot of those workers will simply change jobs – see http://www.dailymercury.com.au/story/2008/12/17/coal-industry-jobs-still-there-despite-cutbacks/. The Bowen Basin has been in a boom, and booms don't go forever. As an investor you need to allow for that fact.
Maggi wrote:There has been some capital growth in the last 6 months and rents have definately risen however there has also been an increase in homes for sale as listed on realestate.com which could be investors deciding to cash out before the tide turns or residents taking advantage of the higher prices to sell older homes and build newer ones. I would like to buy a second property in the area due to the high yield however whilst most factors are pointing towards growth the thought of a sudden decline in growth and or yield in the near future due to the world economy has me sitting on the fence.My only comments on this are that property is a long term investment. You must be prepared for downturns as well as booms, and your reasons for investing in an area must be based on your views of the longer term opportunities. Sitting on the fence is OK, just don't do it forever. Perhaps while you are on the fence, you can work out some investment criteria for the coming months. e.g. if there is no significant positive news in the area by ?? date, then you will stop looking in that area. If there is no significant negative press by the same date, you will bite the bullet and make an investment, provided it meets your yield criterion. It's important to have a date that you will get off the fence by, one way or the other.
My advice is to make investment decisions that align to your strategy and to the fact at the time of the investment. You can't predict the future. Put a lot of effort into your strategy and investment criteria.
When downturns hit, you look back at your reasons at the time of purchase and work out if and how you would change your criteria next time. Then keep moving forward.
All the best,
Daedalus
If we listen to the media the end of the world is upon us. Basically they will say what ever it takes to sell papers etc. The media are not well known for their honesty.
Even with all the global economic turmoil China's growth rate is still predicted to be running at around 7 – 8% in 2009. Even if it falls as low as 6% this is still a massive growth rate and demand for our resources will still be high.
Almost all of the cuts in the mining industry have been contractors on expansion projects that have been put on hold. These projects have been put on hold not canned. As investor confidence in the market starts to grow again through 2009 the resource sector will start to ramp up again and these expansion projects will come back on line.
We should be viewing this as a small bump in the road not a bust as the doomsday spruikers are predicting. Smart investors will make a lot of money out of this little flat spot.
Thanks guys
I agree with all of your comments. Unfortunately I have a few family members who like to put the negative articles under my nose which can have a tendency to undermine all the research and strategies. It is nice to hear a bit of positive back up.
Cheers
The Chinese and Indians dont want to live in tents anymore. They will become more westernised and become middle class societies.
coal, gas, copper, iron ore etc.
The only ghosts town you will find will be in rural China, highly unlikely in the bowen area.
Sure some towns might contract and yields might drop there for a couple of years but this will provide golden opportunites!Maggi wrote:Thanks guysI agree with all of your comments. Unfortunately I have a few family members who like to put the negative articles under my nose which can have a tendency to undermine all the research and strategies. It is nice to hear a bit of positive back up.
Cheers
These are usually the same people who don't bother to do ANYTHING with their lives. Good on you for taking control of your own destiny! Ignore anyone who hasn't taken control of theirs – they have nothing to teach you.
Daedalus
Hi Daedalus,
Firstly I would like to thank you and other investors on this forum for sharing your vast wealth of knowledge, its been greatly appreciated.
Well then…..
I am looking at investing in the Bowen or Surat Basin, being new to mining town properties I am a little reluctant as the risks associated with mining towns are quite high as previously mentioned. I do agree its all about timing….!!
I have narrowed my search down to two towns in the Bowen Basin (Collinsville and Blackwater) and One in the Surat Basin (Wandoan).
My No. one preference at this stage is:
Collinsville
Recently there was an article in the Smart Investor regarding the town of Collinsville, its close proximity to important infrastructure projects (Major Power line Upgrade to Nebo, Coal Rail "Missing Link Project" and another Coalmine in the pipeline). The towns two major mines Sanoma and Collinsvile both produce high grade Coking and Thermal Coal, which is also another good sign as thermal coal is used locally in power generation. Speaking to agents in the area they are saying rentals are scarce with properties yielding $400-$600/week and you can still pick up a decent 3-4 Bedroom Houses for under $300k.Whats your thoughts on the area? Would my money be best spent elsewhere such as Blackwater?
Also Whats your thoughts on Wandoan? I have heard there is plenty of private and public money being spent there, however its still in the early stages of development. Might be a good opportunity before demand picks up though?
Any help or advise would be greatly appreciated!
Cheers
Manni
Watch "Doom & Gloom Michael Yardney"
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