I am about to purchase my first investment property and i like the idea of positive gearing as opposed to losing money for tax purposes…My thoughts to make this stratergy possible would be to buy a property in one of these cheap out of the way towns. and wait for the mine to push up property prices. My question would be is there such a town left in WA or are these stratergies already monopolised??
the million $$$ question! lol IMO Moranbah and Dysart have had their run and they are seeing property prices plateauing out or perhaps a ‘re-adjustment but that’s QLD not WA’. WA’s prices are still high but the talk there is that it’s still a big ole boom! Notably Port Hedland and Karratha. Have you researched any particular place?
Hi mickadee,
There is an piece in the paper on a 5 billion investment for Perth, but I couldn't advice on any future mining in WA.
Qld has some potentials within the Galilee basin, but there are no guarantee's in this financial climate.
Good luck !
Newman and Onslow in WA are towns with plenty of potential, easily earning over $2,000 per week in rent for a decent 4 bedroom house. Houses are generally sold based on an 11% return and capital gains in Newman particularly have been substantial.
Often the best way to increase return (as land can be hard to get a hold of) is to demolish the existing house and build multiple dwellings or dual key premises.
Hi Mal,
Onslow is an interesting one.
I expect getting funds for a lend in Onslow will be extremely hard – I expect lenders will consider it to be highly risky. We are hearing the Onslow LNG companies are looking at Karratha, over Onslow, as a place to house their construction workforce.
Insurance premiums will be high in Onslow – cyclone alley it is.
Very small town too – which increases risk exposure to investors.
Mick – I would be wary of trying to jump in before a mine is established. That is a really a high risk strategy – Ravensthorpe and Hopetoun would be classic example where that strategy has failed. There is a lot of work required to bring a mine up to production levels so you could be waiting a few years.
I would agree with Mal on this one. Even though I'm substantially bearish mining these 2 towns are probably as close as you'll get to a safe bet. Note that Onslow is Gas not mining.
Newman is the central hub and feeds support to BHP's local mines, FMG have area HQ's (albeit small) their that connect with Solomon, Cloudbreak and Christmas Creek. Gina and RIO have several mines just up the road, West Angeles, Hope Downs, Yandi and the proposed Roy Hill and then there's access to a smaller hub located at Tom Price/Paraburdoo. There's exploration and mining going on just east of Nullagine and there's also early stage discussion and feasibility studies on a rail link that I think is supposed to run up the east side of the Marble Rd.
The majority of the Central Pilbara mining activity swings around Newman so even with the contraction you're not likely to see much of a change there.
Onslow is a tiny coastal village in reality. It's the onshore landing site for the gas pipeline coming in from the Wheatstone fields. Given the size of off shore gas fields (North West Shelf) anywhere from Exmouth though Onslow to Dampier/Karratha is a reasonable bet if it involves oil and gas. Some like to include Broome in that picture but until there's a definitive go ahead with the James Price Point project I'd be holding off. There is talk that this project doesn't stack up against alternative options like Shells on sea processing platform in the Timor Sea or a sea bed pipeline to Dampier.
Newman is the southern gateway into the Pilbara and there are no practical alternatives. For that reason alone it ranks as one of the safest regional bets in WA.
Anything to do with Oil and Gas is is a good long term bet. It's one industry where long term demand is assured.
REIWA Stats & Market Information for Onslow here
REIWA Stats & Market Information for Newman here
Readers need to be aware some marketing groups & REA have been actively marketing Newman. With only 52 sales in Newman over the last 12 months median prices are subject to distortion.
Similarly Onslow has had a significant median price increase but this is only based on 16 settled sales in the past 12 months.
Derek wrote:Readers need to be aware some marketing groups & REA have been actively marketing Newman. With only 52 sales in Newman over the last 12 months median prices are subject to distortion.That would be frenetic for Newman. RE.com lists 59 currently for sale but interestingly only 8 rentals. REIWA indicates around 2500 properties so a vacancy of 8 is pretty tight to say the least although REIWA also states there are 506 uninhabited properties.
Quote:Similarly Onslow has had a significant median price increase but this is only based on 16 settled sales in the past 12 months.16 sales would be almost all of Onslow.. somebody bought the town
Hi Freckle,
Just speaking with the guy who manages our development projects for our clients and a quick look at Onslow tells us the town is zoned R20 – so limited scope for development there. Compounding this is a distinct and significant lack of service infrastructure which is going to hamstring the town for a while.
Mind you Chevron are currently seeking tenders for 400 unit office space in Onslow with 10 yr life. Details are a little sketchy at the moment.
Hi Guys
Thanks for the feedback, as is my understanding land is extremely tight in Newman, this is sustaining rental rates, Newman is apparently in the centre of several mining operations and its population is set to rise significantly and with only moderate land releases coming on-line I believe its a fairly safe bet, the entry price can be high but I believe the returns justify the prices.
The local hotels are "Perma-booked" to mining companies, we stayed 18k out of town in a 3.2 transportable hotel on blocks for $180 a night, so the $3,000 per rent is comparatively cheap to pay.
The council is rezoning several sections of the local town to maximise the amount of redevelopment, I see this as one of the better options as land is in such short supply.
Also, just because the Mining industry isn't booming, does mean there is no money to be made!
Hi, Just wondering what you ended up doing? Newman or Onslow?
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