QLD mining regions (Bowen & Surat Basins & Gladstone): Willing to help anyone with questions

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. 

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 Tinsell, 

It may be worth reading other parts of this thread as there is simply information provided about the towns in regional Qld. In fact, from an economics perspective I actually advise not to invest in areas that have coal seam gas operations.