NSW Broken Hill for first IP?

How can you compare the drop in a 1 million dollar property in moranbah to 200k to 100k properties in broken hill ?
You realise that most queensland properties went backwards in cg from 2008 - 2014
Not saying broken hill will have gains in the near future But those examples arnt really relevant

 

It's a clear illustration of the points people are making:

Regional = higher yield, lower CG, higher risk.

Metro = lower yield, higher CG, lower risk.

 

Those rules dont always apply

If you were around somersoft 4 years ago it was the exact opposite

Metro going backwards regional booming
Its all about cycles

 

Not necessarily, some regional might be on the nose presently but it's not all equal.

 

Anyway lets look at the gains over the next few years for parramatta
Then well compare to a regional like port macquarie

 

And what point is Broken Hill at? That's what this thread is about and the regional vs metro example are the points other posters are making.

Is Broken Hill primed for growth? Or is it high risk, high yield and low CG?

 

Which will be interesting, but have no relevance to Broken Hill.

 

Broken hill is at rock bottom

Yellow cake could be a boom for it and the whole of SA - not holding my breath though

Of course its high risk but there will come a point in time when it turns

You were the one banging on about regional vs metro
That argument does my head in - both can do well but they behave differently and a lot of jonnys on here point to the sydney boom as a reason to only invest in metro
What did sydney do from 2004 - 2012

Doughnuts

 

Regional areas like Broken Hill behave very differently to Metro.

There is regional and then there is whoop-whoopville region which BH is in the later. As long as you understand the risks, buy dirty cheap and understand that sales/rentals will behave VERY differently to metro....

@Big Will your funny. You should be a comedian.

 

Actually I made one post about regional vs metro after you questioned the relevance of @Big Will post.

 

The thread is about Broken Hill.

I wouldn't touch BP personally, it's too high risk although I understood others are happy to take the chance with high yields.

I just think it's a broad generalization to say regional is higher risk, lower cg, I just don't think BP is a good example of a regional worth investing in, there are plenty of others.

 

I should replace 'Regional' with 'Broken Hill' because that was the point of the post. From the OP's last post they seem to think BH is relatively low risk.

 

Your friend wouldn't be an Agent or be trying to get out of "The Hill" by any chance?

 

Yes, from a capital perspective it's high risk. I suppose the entry cost is so low its not like spending 800k in a mining town.
Why anyone would buy 3 of these I don't know.

 

Go buy the properties like I said I really don't care what you do, if you think it is rock bottom and it is going to boom go for it go buy the whole town for all I care. However there isn't much work, people are not looking at retiring there, it is close to everything you could possible want if you like rocks and dirt and the population is stagnate at best. Maybe Sydney Metro will build a bullet train from BH direct to Syd CBD that can get there in 30 mins then guess what BH will boom!

Comparing gains from Port Macquarie (which has more than 2x BH population) instead of Broken Hill is like me changing my suburb London CBD. I agree Port Macquarie is a better choice than BH but you asked about BH and I gave you my thoughts on BH.

The estimated urban population of Port Macquarie was 44,875 as at June 2014,[1] having grown 1.6 % on prior year and from 39,471 over the prior decade.[1] Port Macquarie is expected to be the fastest growing place in New South Wales. The town is expected to grow from an estimated 43,655 people in 2009 to 58,888 in 2027.
Source: Port Macquarie - Wikipedia, the free encyclopedia

Quick 101 on economics for you which might help you understand what everyone is talking about... Supply and demand - Wikipedia, the free encyclopedia

Or are you seriously thinking that BH and PM are the same with one city being stagnate at best whilst the other has population increasing...

Yes if you get it right you can make huge gains (think Moranbah pre boom, e.g. buy 100k sell 1M profit 900k) However if Moranbah didn't boom it would still be worth 100-150k today whilst the capitals or larger regional towns have increased (as their population is increasing thus more demand).

 

Thanks Kate

 

4 years ago - Gladstone (picked South Gladstone)
2012 - 435k
2016 - 334k

Loss - 100k

South Gladstone Investment Property Market Data

Compared to Salisbury (Brisbane)
2012 - 428k (pretty close to Gladstone in price at the same time)
2016 - 530k

Profit 100k

Salisbury Investment Property Market Data

Difference $200,000, hate to be those people on SS who said regional > metro as I would rather be 100k in front than 100k behind but up to you...

Just FYI Moranbah was 2012 710k and today 178k (loss 532k), however if you purchased in 2009 (180k) and sold in 2012 (710k) you would of made 530k. However if you bought in 2009 and still held it today you would of lost 2k (just comparing prices and no other costs/income).

Moranbah Investment Property Market Data

 

Thanks for the lecture big will

You were the one who compared moranbah to parramatta - cherry picking two extremes to support your case

Never said broken hill will boom

What if you buy a 1 million dollar house near parramatta and it drops back to 850k
Youve lost your pants and your negatively geared 20k plus per year

People who bought places in moranbah for 600k are ....

Its timing over location

 

1. Cheery picking Moranbah was more to show you what can happen in regional.
2. Pick any suburb in Syd/Melb/Bris and compare the results... I will await your feedback.
3. Did I say buy in Parramatta now? Even if you did in 10 years time I will promise you it would of increased in price.

Regarding your question now of people who bought in Moranbah for 600k (roughly 2011 median was 629k)... You/they had 1 year to sell at the peak being 2012 at 710k (if you knew it had peaked, go sell courses if you know the secret and charge people 50k to attend).

However you selling a REA would charge you lets say 1.5% (10.5k) + marketing (lets assume 5k) + your buying costs (23k) so at least 38.5k total cost so your profit is 710k - 629k - 38.5k = approx. $42,500. HOWEVER if you still held it today you would have lost ATLEAST $452,000.

Do you need help reading now as I already pointed this out...

 

Here I will do the hard work for you and debunk your BH is the place to invest and the 4 years ago on SS people were saying regional > metro... BOY I am glad I didn't listen to your advice... Or am I cherry picking still?


Brisbane
Mansfield Investment Property Market Data
2008 - 455k
2012 - 468k (SS said not to buy)
Today - 610k (155k up from 2008 or 142k from 2012)

Greenslopes Investment Property Market Data
2008 - 550k
2012 - 569k (SS said not to buy)
Today - 708k (158k up from 2008 or 139k from 2012)

Chermside Investment Property Market Data
2008 - 435k
2012 - 435k (SS said not to buy)
Today - 560k (125k up from both 2008/2012, but ss said not to buy this?)

Sydney
Blacktown Investment Property Market Data
2008 - 319k
2012 - 395k
Today - 660k (341k up from 2008 or 265k from 2012)

Roseville Investment Property Market Data
2008 - 1.35M
2012 - 1.53M
Today - 2.2M (850k up from 2008 or 670k from 2012)

Earlwood Investment Property Market Data
2008 - 659k
2012 - 795k
Today - 1.27M (611k up from 2008 or 475k from 2012)

Melbourne
Dandenong Investment Property Market Data
2008 - 328k
2012 - 375k
Today - 485k (157k up from 2008 or 110k from 2012)

Chadstone Investment Property Market Data
2008 - 535k
2012 - 592k
Today - 933k (398k up from 2008 or 341k from 2012).

Yarraville Investment Property Market Data
2008 - 520k
2012 - 610k
Today - 810k (290k up from 2008 or 200k from 2012)

Sorry for 'Cheery picking' Parramatta but they all seem to have done something similar...

Lets look at some regionals..
Broken Hill Investment Property Market Data - 20k pop

2008 - 130k
2012 - 110k (SS said to buy now)
Today (2016) - 115k (SS allowed you to gain 5k in 4 years, or you lost 15k from 2008)

South Gladstone Investment Property Market Data - 30k pop
2008 - 369k
2012 - 435k (SS said to buy now)
Today - 334k (SS lost you 100k or you lost 35k from 2008)

Warrnambool Investment Property Market Data - 30k pop
2008 - 300k
2012 - 315k (SS said to buy now)
Today - 327k (SS let you gain 12k in 4 years + or 27k since 2008) - funny part is you did better in the 4 years from 2008 without SS then you did with SS.

FYI I do not recall the buy metro being the place to go yes there are people that would of said this, just like there are people on PC saying to buy in PC.

The more remote the place is the more of a gamble it is, hence you get higher yield to make it more attractive and if it booms you will get awesome gains however you can be sitting there for a long time waiting for something that wont happen....