Hello Forum
With all that has happened in Moranbah and other mining towns in recent months I am wondering what the forums opinion is on what role Investment Groups and Investment Spruikers have played in the events in Qld mining towns buying and rent increase frenzy .
Are Property Investors, Property Investment Groups and Property Investment Magazines their own worst enemies?
I am aware that Dymphna Boholt's – Real Estate Success Graduates have been quite active in the area, As has Helen Collier Kotev's from Real Estate Wealth . Sam Saggers from Positive Real Estate came out recently and said he had been advising his clients Not to buy since late last year (2011).
Wondering what experiences you have had and who else has been either recommending or Not recommending the mining town investment strategy.
Are you trying to say that Moranbah madness is somehow different from any other miner madness over the period from 2005 onwards?
Are you trying to say that the commodities markets dont know what they are on about when they are busy repricing these metals on the markets?
Because if you are .. you are suggesting that demand and hype renders investors unable to visualise the fundamentals. And thats kind of wrong. Most serious investors get to KNOW their substance and the backing behind it. And then .. when the figures and the reasons and the logic go out the window .. they sell off to the speculators who are busy driving the price into the stratosphere.
Nathan Tinkler might be seen as a one-off speculator .. but he did the right thing .. at the right time. He sold up to purchase a non-functioning coal mine in a period where demand is high and getting higher .. used OPM for finalising the deal .. and ended up owning a mine. All parties were satisfied with the end results of the deal .. and they ALL made money. Thats how you do a deal.
Once the investor ceases to see value beyond the fundamentals .. he sells. Its the speculator who becomes dangerous .. he'll drive that price into ridiculous territory and .. that doesnt work for anyone. Neither the miner who KNOWS he can get better value .. the Mining Company who at a certain level will just buy land and build their own housing .. (what .. you didnt think of that ??), or the locals who regardless of how overpriced their existing houses become … still feel they are being cheated on all fronts.
Its something where a responsible local council or government should step in and produce temporary measures to alleviate the situation.
But that would mean a local government actually taking responsibility for its area in Australia.
Good luck with that.
Given the level of risk, I don’t believe investment groups have any place in mining towns.
Too add to this I also believe by the time investment groups get around to focusing on these kind of hot spots its already too late. The first round of investors are usually just selling into the new pent up demand. They just create the demand that allows the smart money to sell into at high prices.
Based on the level of risk I don’t believe anyone should be advised to invest in mining towns, rather it needs to be a decision they arrive at on their own.
I believe these groups and recent pent up demand is also overshadowing how great the risks are.
I went to a renovators home show event about 12 months ago where one of these companies were pushing for housing in these mining towns – overpriced for my own liking. My brother had bought property in Mt Isa many years ago, and during an uncertain time in the mining industry he sold them for not much more than he had bought them for a couple of years earlier…. so I have seen what happens when things do turn a little sour. I lost faith in the company trying to sell me this kind of property when while speculating they said that the only way interest rates could go was up, and the guy I spoke to wasnt even aware that the Reserve Bank meets on the first tuesday of the month to decide what they are doing with interest rates.
Hello Forum
Well watching the property prices in Moranbah over the last 9 months or so has almost been like watching the stockmarket rather that the property market.
Its also been interesting to read the comments and articles of various Spruikers and investment groups who have gone from recommending people buy in the town to doing a 180 degree turnaround and advise the total opposite within a number of months.
http://www.apimagazine.com.au/blog/2012/04/is-the-magic-of-moranbah-over-2/
It seems to me that this demonstrates the impact investors can have on a relatively small town who have the big city mentality of where they live. Its a simple case of basic economics and also demonstrates the volatile market that mining towns can be.
What are your thoughts ?
The thing is, the average punter is looking for the next "big thing".
So when you read in API that a certain area is about to boom it's a self fulfilling prophecy because all the punters run there to buy property.
Fact is though that those who know what they're doing have already bought there and the sudden rush is great for them. But it doesn't mean it's sustained.
So yes investment groups/magazines etc have a lot to answer for.
You just need to have a look at the ownership records to know what a massive impact investors and investor groups have on a town that looks suspiciously like a ponzi scheme such as Moranbah. Plenty of money has been made and will be in the small mining towns but the risks will only be fully known after the fact, also there are other issues to watch out for such as build quality with ‘investor grade’ properties that are brought to market quickly to satisfy the demand. Tread carefully.
With the announcement that a new 3200 man camp has been approved and rental vacancies still high seems that the gloss has gone off Moranbah at the moment. Still there is lots of activity happening up there.
Hello Forum
With all that has happened in Moranbah and other mining towns in recent months I am wondering what the forums opinion is on what role Investment Groups and Investment Spruikers have played in the events in Qld mining towns buying and rent increase frenzy .
Are Property Investors, Property Investment Groups and Property Investment Magazines their own worst enemies?
I am aware that Dymphna Boholt’s – Real Estate Success Graduates have been quite active in the area, As has Helen Collier Kotev’s from Real Estate Wealth . Sam Saggers from Positive Real Estate came out recently and said he had been advising his clients Not to buy since late last year (2011).
Wondering what experiences you have had and who else has been either recommending or Not recommending the mining town investment strategy.Yes I think the groups have had a lot to do with the prices going up, because the market is so shallow. If you promote a small region to hundreds of people who rush in at once, it creates a disaster later on.
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