Hello, im really keen to buy in gladstone, but im doing a heap reading and research and wanted to get some real life examples of people who have bought and invested in Gladstone, especially in new estates, what the advantges, pitfalls etc etc, what the betters estates and how they compare and any other information people can share with me. Ill do likwise when i retrun from my trip up there within the month.
Id love to knowledgeshare with like investors.
Cheers
DMHi danger mouse,
I flew up there 4 months ago and had a look around I was quite impressed with the Gladstone however, Im not sure why you are only looking at house and land packages. For that sort of money you could be closer to the city in an established suburb, I found some of the housing estates to be out near the airport and further out of town. When I was up there I was told and saw for my own eyes their blue chip suburbs, where most people wanted to live were Kin Kora and Sun valley and for the price you are looking at you could buy in them ready to go and get a bit of change out of 500K..just a thought
Hi Danger mouse,
My company recently completed 25 house and land package deals for our members and a few staff. Here are the basics:
Total Val on house + land was $460k.
Clients received upfront equity of $85k upon settlement of the land.
This equity was then used to purchase the land – 20% Dep + Costs.
The remainder + 10% of deposit was used to Finance the construction
through the progressive drawdown with no headaches.Final lock-up re-valuation came up at $480k giving the clients an extra bonus!
**** End Result: Clients used none of their own money to purchase a house + land
package at $460k But gained 23% equity on completion (including the unexpected
extra $20K increase in final valuation.Hi John
Which estate was this in? and do u have an deals left, im considering all options at this stage before making a final decision.
Many thanks
DeanHi Dean
We have been working in Gladstone for a while now and there are quite a few quirky things that you should be aware of, but apart from that, it's the No.1 hotspot in Australia right now, and probably will be for a while longer.
Like any large city, Gladstone has good and not so good locations to look at. House and land is where the money is made. We have Clients that have made VERY good growth on their purchases, and this is really because of buying a good size block in good area. I know there are cheaper locations, but buying cheap doesn't always mean better. 400sqm lots just won't get the same growth as what a 800 – 1000sqm lot will get and when you look at the difference in starting cost, the price really isn't that much different.
The big benefit of H&L packages is the saving on STD and as John said, the gain that can be made just by you being the one to build the House definately has it's benefits also. We have seen the same sort of price increase that John has mentioned. It really does work and there are some really good suburbs with plenty of potential for growth.
Hi Dean,
I am not involved in the sale of properties in Gladstone, but I do own a property in Gladstone, which I purchased just before the announcement/boom.
I personally lived in Gladstone for work for a bit over 12 Mths and this was my Principal Place of Residence.
I am also a Real Estate Agent and own a dedicated Property Management company (Not in Gladstone).
Would be more than happy to give you some insights into the area based having lived there as well as the bonus that Investment Property is what I look after all day.
Feel free to give me a buzz for a chat or send me an email.Cheers,
Paul Cole
0402 744 677Hi Dean,
No there are none of our Gladstone deals left currently – all 25 were snapped up in a flash, as you’d expect. I’d have to go and find out which estate they are in as this was a deal my business partner did earlier (they just settled in the last month or so I believe).
Hi All, First time posting on this site. I work in the property/lending industry and have been watching Gladstone closely. So closely that I have a contract for a 4 bedroom house on my desk. I havent yet exchanged as I am becoming more hesitant on Gladstone and its prospects. Yesterday I read the following artcile from HTW valuers August monthly report. Some interesting insights into Gladstone. Would love your thoughts on this as capital growth is all about demand and supply and the restriction on land supply/development and going on this article it seems demand may waiver given future housing stock/developments coming onto the Gladstone market:
"It is very difficult to gauge where the Gladstone
residential market is heading. After approximately 12
months of strong capital growth and high rental returns,
market activity began to soften in November 2011. More
recent market transactions have indicated a decline in
market values. Our enquiries with several local agents
indicate that listing prices have dropped by as much as
20% with around 5% drop in actual selling prices. With
the ever increasing amount of competition coming onto
the market, we consider that further market correction
may occur.
As discussed in previous editions of the Month in Review,
one of the main influences over the market were the
number of workers required to construct the LNG plants
and other major projects being developed in Gladstone.
According to recent data, the peak workforce of around
8,000 workers is expected around the end of 2013/early
2014.
Approximately 5,300 fly-in fly-out workers will eventually
be housed on Curtis Island in workers camps. These camps
are being built progressively. A further approximately
3,800 rooms are planned on the mainland (number of
persons unknown).
The number of people in fully operational workers camps
will relieve significant stress off the Gladstone rental
market. This has already been displayed in some cases.
Recently Bechtel (major construction company building
the gas plants) reportedly handed back 125 rental houses
and units to the rental market, temporarily flooding
the rental market. Agents are reporting that rents have
stabilised and that vacancy rates have increased slightly.
Furthermore, a local inner city motelier has advised that
occupancy rates have dropped by approximately 30%
on the back of more and more workers being housed in
camps on Curtis Island.
Other than workers accommodation camps we are aware
of the following proposed accommodation in Gladstone:
• In the order of 1,061 allotments are currently under
construction or close to construction.
• Approximately 120 units currently under construction
in Gladstone. A further 849 units have development
approval from Gladstone Regional Council but have
not yet commenced construction.
• A new 60 room motel (Mercure) adjoining Yarralla
Sports Club on O’Connell Street, Barney Point is
nearing completion.
The above indicates a huge supply of accommodation
which will be bought to fruition over the next couple of
years to combat the accommodation demand for workers
in relation to major industrial projects in Gladstone.
This stock if not absorbed by the market, will potentially
result in price discounting for end lots/houses/units and
in turn impact upon the value of development sites.
At this stage it is difficult to predict the affect on the
market moving forward, however we believe that there
are increased market risks at this stage of the property
cycle for Gladstone and purchasers should be acting with
caution"
Thank you Syd Investor for sharing this article; again a confirmation that it is just too risky to invest in resource towns, unless you go in early with an exit plan in place.
I live in Gladstone, having moved here a bit over a year ago. We bought a house at the time and indicators then were that a massive boom in house prices and rents had just peaked and was starting to ease back. As mentioned above by other posters, there had been a major shortage of housing for some time and the old supply/ demand laws were very evident in the high prices and rents.
Over the last year there has been a massive amount of construction going on. I don't think i have ever lived in a place where there are so many housing estates and unit blocks going up at once. Seems like everywhere you look there is another housing estate being built. A year ago, when we moved here everything was selling and renting really quickly, but now you see a lot more empty houses than there used to be and there are a lot more places available for rent. The fact that there are even more housing estates still under construction, combined withthe fact that more workers are going to be moved to the camps on their completion indicates to me that the supply/demand scale is going to lean more heavily towards an oversupply fairly soon = reduction in prices/rents and higher vacancy rates.
From talking to long term locals it would seem the ideal time to buy would have been 2-3 years ago. There is no denying that there is a massive and diverse industry base here that is far from reliant on any one particular industry and that should underpin a strong base for many years to come, however there are probably beter options around the country at the moment.
rhino101 wrote:I live in Gladstone, having moved here a bit over a year ago. We bought a house at the time and indicators then were that a massive boom in house prices and rents had just peaked and was starting to ease back. As mentioned above by other posters, there had been a major shortage of housing for some time and the old supply/ demand laws were very evident in the high prices and rents.Over the last year there has been a massive amount of construction going on. I don't think i have ever lived in a place where there are so many housing estates and unit blocks going up at once. Seems like everywhere you look there is another housing estate being built. A year ago, when we moved here everything was selling and renting really quickly, but now you see a lot more empty houses than there used to be and there are a lot more places available for rent. The fact that there are even more housing estates still under construction, combined withthe fact that more workers are going to be moved to the camps on their completion indicates to me that the supply/demand scale is going to lean more heavily towards an oversupply fairly soon = reduction in prices/rents and higher vacancy rates.
From talking to long term locals it would seem the ideal time to buy would have been 2-3 years ago. There is no denying that there is a massive and diverse industry base here that is far from reliant on any one particular industry and that should underpin a strong base for many years to come, however there are probably beter options around the country at the moment.
Hi Dean,
I would take some time, slow down and take note of Rhino's post. IMHO it is accurate. Gladstone is a fantastic market to have been in but the time was 2-3 years ago. Like most markets that have stellar CG for a couple of years it has pulled back significantly and there is a glut of rental stock on the market. I have property in a town that is influenced by the mining industry and sometimes it can be a roller coaster ride. Gladstone is diversified and is a robust market but is still heavily reliant on the industry.
Be extremely careful who you take advise from and make sure that the source you get your information from has your interests foremost!
Take a read of Rhino's post again. I think its a very accurate reflection of the market in Gladstone.
Cheers mate,
Jack
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