Hi stu_macca
I know exactly how you are feeling !!
I recently purchased a property in Moranbah and also bought one in Dysart at the end of January.
I have done extremley well out of both of these properties in terms of both growth and in rents.
I too keep thinking that it is all too easy and too good to be true. I always said that if things looked a bit shakey i would be outa there in a flash. I actually rang an agent last friday to list them but changed my mind a couple of hours later and withdrew them!!
Im still there but have been keeping a very close eye on the market.
A property was lited in moranbah last wednesday for $450,000 and sold within 24 hours for $465,000.
A rental property yesterday had already received 13 applications at $1,000.00 a week for your basic lowrise 3 bedder and it was only mid arvo.
A friend of mine who bought a 5 bedroom highrise in Dysart 4 months ago rang one of the larger mining companies yesterday to see if they were interested in renting his property (already has tenants, he was just trying to get a feel for how things are going). They were happy to sign up on a 3 year lease for $1,400.00 a week.
Nothing seems to be slowing down in the Bowen from what I can see.
BMA are still spending big up there and another company just bought a 1.4mill block of land.
I know that this could all change at any time. But I have decided to ride out the storm and hopefully not regret it.
Thats today anyway
Good luck
Fingerscrossed
I've been investigating cashflow positive property to balance my existing grwoth portfolio and of course mining towns like Moranbah, Dysart and Blackwater etc. all appear on the radar screen. But as has been mentioned above by others, these places seem to be too close to their top and any mine closures could be devastating. Long term I believe in a continuation of the commodity boom (next 1-15 yrs) but also think that in the short / medium term the commodity prices will stay depressed and that may have some consequences.
What I am now wondering is whether I should be looking at towns where the mining supply chains converge, e.g. transport hubs which also have other industry?
Has any body looked into the areas where the QLD coal seam gas is / will be produced? There are major plans for several LNG projects based on coal seem gas.
As part of my research I have also (with a lot of effort) found some very surprising cashflow positive properties in much more robust areas with decent potential for capital growth. Less spectacular but a lot less risky…
There are other mining towns that fly below the radar that offer excellent returns off a much lower base. Try the lower bowen basin. Belvedere has just submitted applications for mining leases, previously they were only exploratory leases. This will be a massive underground opperation. Land currently being purchased for construction of a new IGA (all additional infrastructure is favourable). New motel approved and awaiting construction. New shops buing built on entrance to town. Still chronic shortage of housing. I am rather chuffed with my little mining town investment!!
Just my 2cw
Mick
Hi again,
Fingers crossed – thanks very much for that. It's comforting to hear that someone else is in the same boat, and looking at this in a similar way. I would be interested to hear how your thinking develops. I'll keep checking in with my thoughts.
ErikH – I had heard that there was gas near Moranbah. A quick search yielded this: http://www.arrowenergy.com.au/page/Worldwide/Australia/Moranbah_Gas_Project Is that what you meant?
Thanks also Newbi2 (or is that "not so newbi now"?). Will give it some thought, but probably not add to our complication right now (even if the banks would let us). Best of luck with that one.
Cheers,
SMSM – thanks, but the projects I was referring to is a $8.8 billion LNG project by Santos (and Petronas) which will see coal seam gas being converted into LNG at an LNG plant in Gladstone. There is also a BG (together with QGC I believe) LNG project which is also aiming to produce coal seam gas and sell LNG through a Gladstone LNG terminal. Both projects are in their early stages and probably 5 yrs away from being operational. The LNG terminals will create a big amount construction jobs, but probably only about 200-300 jobs once operational, not sure how many staff they will have in the field to operate the coal seam gas wells – nor I do I yet know where they are getting the gas from. Will do some more research…
Stu
Both coal prices and shipping to China peaked in July. There is a lag in both new contracts and finally prices in your area. Do some serious homework – all emotion aside you are managing a massive risk position.
http://www.incrediblecharts.com/tradingdiary/trading_diary.php (Oct .22 Article)
I work in the CSM industry. Yes there is a lot on, the majority fo the wells are in the surat basin Roma/Miles/Dalby and also the Bowen Basin. The conversion to LNG is very promising and I hope it goes ahead. There are still some hurdles with this such as investment sign off and what to so with the waste water. All the big players are saying they will build their own LNG plants in Gladstone which will be fed by wells and gathering systems in the basisn then large pipelines to Gladstone. I beleive the right answer is one LNG plant and one pipeline from teh Suart Basin and one from the Bowen Basin.
Theer is another major LNG propject propsoal we rae looking at as well which if it goes ahead will be very good for QLD and teh LNG plant wont be in Gladstone it will be further north.
I travel out there frequently and you cannot get accomodation anywhere. You can buy a band new townhouse in Chinchilla for $309k renting at 500 a week.
hi ,i have just moved to emerald and got a job in the mining industry
obviously with my real estate antenna out
(scamp will have a ball with that but i was a freelancer anyway so i didnt have a job to loose or give up ! )
really enjoying the time off between shifts
stayed in a camp for over a month and it was no funmy notes for those who are interested
all the miners have kids, dogs (two at least) two cars and a boat or motorcycles
so while any old shack with a roof may rent out,what your customers are looking for needs a lot of storage and some decent fencing
my company looks for 3 bedroom houses unless a suitable number of children justify bigger
in emerald the" cap" is $450,my company is un willing to pay more
i went to the agent and asked for the rentals list ,they said "we just write the address on the back of a business card"
i took our house un seen as the previous one had gone by the time i got backmy company and several others have a really generous scheme should you choose to buy a house,and get off their rent list………
people who dont work for a company such as mine put a lot of time into the gardens etc as it is the only way they can keep the rent down
i am still constantly amazed by how few people it takes to run a coal mine,any job that can be mechanized or outsourced is one less safety concern and they are way concerned about safety
so far no one out here is "talking it down"
in fact the vibe here is like sydney back in the tech stocks bubble days !
lots of people rushing around,making money and having a good time
lots of rumours about the next mine opening up etcbuying cheap in a smaller town and waiting for a mine to open is a huge punt but hey if it worked every other time….
cheers !
Hi stu_macca,
I'm an underground diesel fitter in the Qld mines and i have 6 investment properties in the surrounding towns.
I can say that you will have some ups & some downs but you will do fine.The coal industry has a good track record as China, Japan, Spain (just to mention a few) still need more coal for their steel mills, at this moment coal companies profits are still high, and the demarnd is still there.
The coal industry is possibly the only thing stopping oz from a major problem economically speaking.
Just take a look at how many ships are waiting to be loaded off Mackay
Make hay while the sun shines & watch the signs (small stock piles,reduced shift hours,poor up keep)
Regards Rob
Thanks Rob.
How would I go about checking for "small stock piles,reduced shift hours,poor up keep"
Well, thats always the challenge, getting the right info at the right time.
Spend time out there, get talking with the miners themselves, but remember facts, not what they think.
One thing about coal mines is that word travels fast and you will hear about the rats jumping ship
we are a very transit group of workers who are happy to talk with a beer in our hand.Have fun regads Rob
………………….and the band played on, all the way to the bottom………………….boom, crash , the end.
From the news it said that Japan's having a big fall.
How is the mining area today?
Is the property market still doing fine?Property boomtowns turn to bust
HOUSE prices in cities with high exposure to mining, manufacturing and the car industry are expected to stay flat for up to a decade, according to a leading property researcher.Residex chief executive John Edwards said Perth property prices would stagnate after more than doubling in the past six years.
The city would revert to being the country's fourth-most expensive behind Sydney, Melbourne and Brisbane after taking second place during the mining boom.
In the West Australian mining town of Kalgoorlie, real estate agents were already reporting significant price falls, reports The Australian.
Ron Hunter, from Elders Kalgoorlie, said there had in some cases been a 25 per cent drop in property prices over the past six months, which was due to a combination of nickel mine workers being retrenched and the global financial crisis.
But a strong gold price continued to underlie a relatively buoyant local economy.
John Matthew and Sons agent Allan Pendal said there were signs the Kalgoorlie market had reached a plateau.
"There are instances where properties are being placed on the market at prices lower than they would have been this time last year,'' he said.
In the Pilbara town of Karratha, the mining slowdown had not yet dramatically affected home sales, but rental properties were becoming available for the first time in several years.
"Our vacancy rate is about 0.6per cent,'' Lindsay Gibson from Ray White Real Estate said.
"It's been a couple of years since we've had anything vacancy-wise on the board.''
According to Mr Edwards, other cities anticipated to decline were Melbourne, where much of the country's manufacturing industry was located, and Adelaide, where GM Holden is based and which last month announced it would halve production next year.
Last month, Sydney's median house price was $565,000, the figures showed. Melbourne, the Australian Capital Territory and Brisbane's median house prices were all above $445,000.
"Brisbane is such a diversified economy, and the resource towns are scattered up and down the coast of Queensland,'' Mr Edwards said.
The figures also showed that the price of units fell by more than 4.2 per cent for rural Queensland and WA, suggesting a slowdown in the rural sector could be hurting the economy of regional centres dependent on the resources sector.
The country's average rent, however, is $340 a week, up from $300 in November last year.
Read more in The Australian.
What your gonna see in the next 15-20 years is a shift towards green energy backed up by the law. I wouldnt hold this for more than 10 years.
I wonder how stu_macca's investment properties are doing now.
I guess the dropping dollar didn't magically add 30% to the profits of the mining companies after all , did they ?
Sincerely though stu I hope you're doing ok m8, I don't wish misery on anyone : Let us know how you're doing please.Scamp wrote:I guess the dropping dollar didn't magically add 30% to the profits of the mining companies after all , did they ?No but it did cut down the labour costs by 30% and gave them 30% more returns in AUD which shielded them somewhat from the falling commodity prices.
suavemechanic wrote:in fact the vibe here is like sydney back in the tech stocks bubble days !danger! danger!
I remember my grandparents house in Broken hill sold for $30,000 about 8 years back. It was probably the best in the street but they were the last to leave. You could get one in the street for under $20,000. If this happens again. I will consider buying and boarding it up for the next boom. There will be a next boom. Got to get in early but.
devo76 wrote:I remember my grandparents house in Broken hill sold for $30,000 about 8 years back. It was probably the best in the street but they were the last to leave. You could get one in the street for under $20,000. If this happens again. I will consider buying and boarding it up for the next boom. There will be a next boom. Got to get in early but.There's always a next boom. The question is if you will earn more by investing there as opposed to investing in something else. My guess : you will earn much more by investing somewhere else. Don't forget that maintaining the house to a suitable standard will cost you a lot of money if they steal your rooftiles and windows and doors every weekend.
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