Hi,
I’ve been hearing about Bowen for quite some time now. I am currently considering purchasing a “Off the plan” unit , closing in 12 months.
Approx prices are 200k for a studio, 290 for a 1br and up to 390 for a 2br.
Is it too late to get on this train? Any further info or experiences in this “upcoming” mining town?Cheers,
MattHi Matt,
That is a very general sort of a question…..
There appears to be a lot to like about Bowen but vacancy rates are high at the moment….however its possible an OTP strategy may work out but I guess it all comes down to timing. I've used a similar strategy in a town situated in the Bowen Basin however, the market is on the rise and I've seen some value come into the property whilst it's been under construction. Get your timing wrong and you could have to deal with a vacant property until the construction force comes in and saturates the market. I remember reading some investors having a tough time of it sitting on vacant properties out in the Surat Basin in recent times waiting for the construction workers.I think it comes down to strategy in the end. The expansion of the port has been delayed to enable a report on the impact additional traffic would have on the reef but I think it'll go ahead.
Might be a case of wait and see?
Not exactly sure about Bowen Basin. I try to stay away from the hyped up areas. Diversity in industry is the best defence against getting stuck having to rely soley on mining for the long-term atleast. One thing to consider is that lenders are generally weary of studio & 1 br properties.
I did read somewhere that it is on margaret lomas and luke berrys watchlists for the end of the year…
RIO PULLS OUT OF PORT (M, Ludlow & D, Hall, page 7 April 21-22 2012 edition, Australian Financial Review Weekend Edition)
‘Mining giant Rio Tinto has pulled out of the $6.2 billion expansion of Abbot Point coal terminal in north Queensland, blaming rising costs and delays in environmental approvals from the federal government’.
Just another example of Federal Labor killing the goose that lays the golden egg!
Strangling the mining industry to get back in the black at all costs after years of incompetence, economic mismanagement and being played for fools by the greens!
Well done!
The good thing about this Rio pull-out is that the issue is now front and central and everyone can see what is going wrong with political system. I hope this forces some hands now. The QLD state govt is of to a cracking pace with three new projects announced that had been sitting on the Coordinator Generals desk for years. One of them is a dam, can anybody remember one of them being built !!!!!!!!!!!
They also said that the recent hullabalooh raised by UNESCO regarding shipping volumes in the Barrier Reef was a stunt. They have made it clear that the UN whatever has absolutely no jurisdiction over QLD projects and their opinions will not be sought or considered with respect to projects. Jeff Seeny went as far to say if he copped any more flack on Gladstone harbour he would carve it out of GBR Marine Park as it wasn’t part of it anyway.
I’d agree. Newman appears to be fiercely committed to getting Queensland back on track economically.
Similar to the WA state government they want a fair share of proceeds from mining being funneled back into the states coffers to benefit Queenslanders…and rightly so I think (I’m not a Queenslander by the way).
BHP have had similar discussions about it’s expansion plans for the Olympic Mine Dam down in SA although this is more an argument about pouring it’s available cashflow into huge expansion projects rather than giving funds back to its shareholders.
Someone needs to pick the ball up on this issue though and drive forwards…….
I have just realised that some of those new projects that got the green light may be adversely affected by the Rio pull out. We may well be over the top of the boom now, given the high production costs, trade union militancy, red/green/black tape and government emailers.
I don’t think there is anything wrong with the states protecting their patch. Let’s face it once the funds are collected by the thieves in Canberra no one gets to see them again.
Mark my words, the writing is on the wall for the current dark forces in political power now. I see another scandal emerging today with respect to the Speaker. So we have hostile state govts, Craig Thomson, Carbon Dioxide Tax, struggling business owners, NBN gravy train, disenfranchised voters, Fair Work Australia which is anything but, Union gouging, a peaked commodity cycle and a very unpopular government that is completely out of touch with economic reality and void of credibility.
However, we (collective Australia) allowed this to happen!
The ‘people’ created this scandalous government and allowed the Greens power in the senate. What did we expect to happen in such a toxic environment?
We have no one to blame but ourselves!
Those are the facts!
It’ll be interesting to see whether the plans of Aldani are adversely affected by this latest setback?
JT7 wrote:However, we (collective Australia) allowed this to happen!The ‘people’ created this scandalous government and allowed the Greens power in the senate. What did we expect to happen in such a toxic environment?
We have no one to blame but ourselves!
Those are the facts!
I see the problem as being one of the party system. No reasonable person would vote for someone that they thought would screw things up. We have this system whereby we elect a member to represent us, yet that member represents his party and not the citizen. We have been led to believe that the political system could not survive without parties, which if you think about is a nonsense. I have the same issue with both sides of politics. There are no other organisational hierarchies that operate along party lines.If you take the US they have perfected this mindset and whittled it down to a two party system.
As for the Greens now that Peak Oil is finished, and Global Warming has been rescheduled then they also have had their moment in the sun.
JT7 wrote:It’ll be interesting to see whether the plans of Aldani are adversely affected by this latest setback?What are these plans I am not aware of them but interested in finding out?
bardon wrote:I have just realised that some of those new projects that got the green light may be adversely affected by the Rio pull out. We may well be over the top of the boom now, given the high production costs, trade union militancy, red/green/black tape and government emailers.Indeed, this may well affect operations right down the chain into the Galilee Basin, the rail infrastructure and of course the port. This has the potential to strip billions of dollars off Queenslanders!
bardon wrote:JT7 wrote:It’ll be interesting to see whether the plans of Aldani are adversely affected by this latest setback?What are these plans I am not aware of them but interested in finding out?
As far as I’m aware Aldani purchased a 99 year lease on Port Abbot. Aldani has massive interests in projects in the Galilee Basin and the rail infrastructure from the Galilee Basin back to the Port.
JT7 wrote:bardon wrote:JT7 wrote:It’ll be interesting to see whether the plans of Aldani are adversely affected by this latest setback?What are these plans I am not aware of them but interested in finding out?
As far as I’m aware Aldani purchased a 99 year lease on Port Abbot. Aldani has massive interests in projects in the Galilee Basin and the rail infrastructure from the Galilee Basin back to the Port.
A house of cards……!?!?
The consequence could be huge, but I don’t see a crash as production levels are now very high and if we just stick to what we are now doing and stop new projects then prices should in theory climb or at least stay level and definitely not fall of a cliff. Lets face it the big guys are playing their cards very well at the moment. With the current level of committed projects they were always going to struggle to get the staff to deliver the new projects and keep the lid on wage rises. This way they have a better handle on current risk levels and an increased level of control on wage levels and delivery of existing projects and a killer punch to the current govt and trade unions. Poker anyone ?
It was only a couple of months ago that I was visiting a site in the Surat Basin and stopped off for a coffee and a Riblet in Wandoan. A quick look in the RE office window , like you do, had me salivating at the low house prices and the high rents. Mrs Bardon would have killed me if I got another one, but maybe with hindsight it was best that I didn’t.
LOL! Yes I must admit I’ve been tempted by Wandoan also and other potential ‘Honeypots’. Was looking at Wandoan a couple of years ago when median prices were around $180k! Would have doubled my money in 2-3 years!
I agree with your general comments mate.
The fundamentals remain firm. Just need to drill down the DD!
Given that Wandaon coal was going to be loaded out of Gladstone, maybe this pull out by Rio up north is a shot in the arm for this project in getting a leg up. Maybe.
JT7 wrote:bardon wrote:I have just realised that some of those new projects that got the green light may be adversely affected by the Rio pull out. We may well be over the top of the boom now, given the high production costs, trade union militancy, red/green/black tape and government emailers.Indeed, this may well affect operations right down the chain into the Galilee Basin, the rail infrastructure and of course the port. This has the potential to strip billions of dollars off Queenslanders!
Now we know why Clive Palmer’s hair turned white overnight.
Hi all,
I was actually in Bowen yesterday and spent about 4 hours being shown around the area by a local. It was a fly in, fly out visit encompassing Mackay as well over a period of 3 days.
The first thing I noticed about Bowen is how spread out it is. There are house and land packages being sold in quite a few parts of the town. I was fortunate enough to be shown what parts to be investing in and what parts to steer well clear of due to environmental issues. Speaking to many people who live in town, they are more hopeful than confident that the Abott Point expansion will go ahead. There general comments are ‘We’ve heard it all before’. There seems to be many vacant blocks being snapped up by prospective investors waiting to the sell their blocks at a profit further down the track.
Developers are also snapping up larger blocks at reasonably good prices.
People including Gina Rinehart and Clive Palmer have already bought up land to accomodate workers as well as a proposed resort contstruciton by Gina Rinehart near Queens Beach. This leads me to believe that they have confidence in the area. Rental yield at the moment is approximately 5.1%.
The area around Bowen is also relient on agriculture (in particular mangoes and tomatoes), salt refining and to a lesser extent tourism.
As for Mackay, rental properties are being snapped up by renters quickly. the rental yields are undoubtly higher than in Bowen but entry prices are higher too. My conclusion was that if you’re looking for a reasonabl rental return with smaller long term capital gain, Mackay is the way to go though if you’re willing to put up with a lower rental yield but a ‘possible’ higher capital gain (reliant on the expansion happening) Bowen would be the way to go. Unfortunately I’m still undecided. Bowen really needs an injection of some sort to it’s infrastructure. They have been developing the foreshore near the town centre but areas including the harbour are reall not advanced enough to reach it’s potential.
Interesting that Rio Tinto has pulled out of the action at Abott Point. My feeling is that they have doen this to place pressure on the Federal Government to make a decision. I’m fairly confident that their attitude would change with a positive decision. If BHP also pulls out then that could be the expansion’s death knell.
Please note that these are only my personal opinions on the region and I am by no means a big time investor. I’m hoping to prepare my own report from the notes I’ve made speaking with local retailers, workers, miners and real estate agents. My advice to anyone would be to go up and make your own enquiries. You’ll be visiting a beautiful part of Australia while you’re at it and the locals are all friendly and willing to have a chat.
Nelson
JT7 wrote:‘Mining giant Rio Tinto has pulled out of the $6.2 billion expansion of Abbot Point coal terminal in north Queensland, blaming rising costs and delays in environmental approvals from the federal government’.What a load of bull. MSM misdirection by big business. Enviro approvals that run into delays are generally caused by big business trying to bend the rules to get a project over the line. In other word I want to dump my toxic waste here instead of trucking and processing it there because it will cost us 4% of our bottom line
Big business know how long enviro’s take to push through the system. They do it daily on 100’s of projects. They are the proverbial experts at enviro law. Blaming Fed govt is just shifting the cause so they can blame someone if they can’t deliver to investors.
Rising costs are there own fault. The big miners have all decided to go hell for leather simultaneously. That’s put immense strain on everything consequently pushing the price up at an exponential rate.
I’m no fan of current govt or opposition MP’s but throwing rocks at them while a lot of you PI’s cream some of the best returns in the market absolutely smacks of hypocracy. Property investors are a significant part of the cost problem.
Rio’s pulled the pin because rising costs and falling commodity prices are the future outlook. All the big miners will do the same over the next few years. The booms peaked. Watch as the billions within the project pipeline dwindle over the next few years.
As Africa comes on line over the next few years iron ore prices are predicted to fall into a range between A$60 – 80/mt from it’s current US$147.
http://www.scribd.com/doc/90674359/Hurst-Africafeo-Eaber-FinalThese kind of assessments will pressure the big miners to seriously rethink the big multi billion $$$ projects for some time. Govts are not the problem. Australia is still way ahead of every other region by streets even with higher costs and govt taxes. The ball breaker is expanding capacity leading to over capacity world wide coupled with falling global demand and Chinese restructuring.
The Freckle
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