Are mining towns making a comeback?

http://www.townsvillebulletin.com.a...e/news-story/94bfc32cd65967e1c22715a69f2c9202

Just saw in the paper today that Glencore is reopening their mine in Collinsville as coal prices are on the up. I own a property in the town and of course today I have been offered a very low cash no conditions offer on the house. I stand to lose $120,000 if I accept the offer. The house is currently not rented and costing me about $200 a week.

There are also 2 new solar plants being built in the town next year adding another 200 or so jobs.

I can afford to take the loss of course it will hurt a lot but what would you do in my situation count your losses and move on from the costly mistake or wait it out. I dont see any real improvement happening though for a few years but we might actually get the house rented with the workers coming into town.

 

LNG and especially coking coal are doing well but the rise in the price of coking coal isnt expected to last.

http://www.theaustralian.com.au/bus...t/news-story/51d7f1935d54a2ade929ebf199512604

 

Depends where and what. But I would say overall things have bottomed now.

 

May we know where?

 

Always hard to know what the answer is... No matter what you do in a mining town, you're pretty much rolling the dice.


Glencore have a reputation for not being very community minded and I'd take any announcement from them with a grain of salt. They'll likely pull the pin if the price turns or if the unions act up again.

I don't know much about the solar projects but the one that might be built on the old power station site will only need a peak workforce of about 50, probably 200 different roles from start to finish.

 

take the money and run

 

Counter offer
Lower your losses by negotiations
Take the loss and move on

 

peter martin's article - Suddenly coal prices are booming. Will the entire country be next?

 

If you want to leave now, keep in mind that the same offer may have been made on several other houses too.
There seems to be a phoenix from the fire going on at the moment. Maybe if you wait a few weeks you'll get a better offer? Will it do your head in to wait longer?
Good luck whatever you decide.

 

Do you live nearby? What made you buy there? I'm assuming you have some knowledge of the greater area to buy there?
If i were you i would do research and find out what is actually happening on the ground and the current supply/demand etc and how things would change if this increase to production happens and would it be worth waiting for an increase to property prices and then also add in your situation

I wouldn't just listen to people from the city that just say sell because they see "mining town" . Mining towns are all different beasts eg perth
Is airlie looking at growth in the near future? Will there be a ripple? Is there agriculture? Is that on the up?

 

I just took a loss on a bad decision I made in 2011 inspired by a hot spotter in a mining influenced location. What hurts more than the loss is the real opportunity cost and for me the sooner I could start a new and find a better opportunity the better.

 

Coal prices increasing will help but won't get back to the "boom" days. The construction of all the mines and gas plants etc are also a big portion of employment.so unlikely it will go back to how it was a few years ago bit it's still definitely a positive and welcomed to get those coal prices back up a bit.
Construction phase may need 1000 people but operation may only require 250 people. Still a big gap

 

Thanks Bob. I would not have a clue regarding the operation of a mine but it certainly brings some cheer to those rely on mining as livelihood.

 

Thanks everyone it is a tough decision but the potential buyers will not negotiate and we are basically giving the house away at the price they want after we also take out RE fees and conveyancing etc. The house has pretty much always rented even in these down times so hopefully by the new year with new people in town it might at least rent again. But I have a feeling we might get some more low ball offers.
Word from the agents is that there are a lot of grey nomads buying up the cheap houses over the last few months and parking their caravans and things there guess if you can buy houses for $40,000 it is affordable storage !
We were up there a couple of months ago things were still quiet and lots of empty houses but this is before coal prices started changing but your are right @Phase2 Glencore can change their mind and I presume most workers will be contractors and living in the dongas.

 

Mel
So true, you can not get that time back, however you can learn from this.

MTR

 

haha yep dont worry we have definitely learnt from this and are just lucky we are in a fortunate position that we made money from "safe" Sydney real estate. Although we did stupidly sell property in Sydney and keep the dud mining property. As for the the lost opportunity at the moment we cant reinvest as I am not working as we just had our third child so really we cant invest again until I am working again in a few years. We are in our early 30's with good equity so I feel we will be able to start again and make some better decisions!

 

where about?

 

where about?

 

I would see this more as a momentary spike rather than sustainable upward trend. The larger cities will get as much benefit from this as the mining towns. especially brisbane and melbourne.

 

I don't know what's happened with the town, I'm pretty sure a lot of people were forced to move elsewhere to get work. There was a huge spat between the CFMEU (most of the town) and GC and a lot of bad blood I think.

As for renting the house out, expect those who are good mates with the local PM to get first dibs on any corporate housing agreements. Be prepared to wait a while longer.