WA Broome and the Kimberley

Does anyone have a view on property in Broome or the rest of the Kimberley? It looks like it has been hit pretty hard despite not really being a mining area. Has it bottomed? Is now a good time to buy?

Any insights/info welcome

 

Have you checked out the vacancy rate in the town/s you're interested in?
There's no point buying a place that might have great capital gains in ten years' time, if you can't rent it out for love or money due to the market being flooded with cheap rentals.

 

Simple explanation = No Browse= No Broome

 

It's a holiday area where it can be hard to find permanent tenants and is also right in the firing line of cyclones which makes it an inherently riskier investment.

If you've done your research and think it stacks up then by all means go for it, it's a regional town not as strongly linked to mining with a pretty reliable history that suggests it will still be there in 10, 20 or 30 years!

 

Vacancy rate looks to be around zero, property prices have fallen about 10% over the year (Karratha has fallen about 30%).

Broome was there before Browse though?

Pearling has taken a hit and not recovered as has Tourism, still lots of social issues in the town also with a lot of groups from outlying areas moving in

 

WA in general has taken a hit, 10,000 job losses last month.
Our State is in deficit... not pretty at the moment.

MTR

 

I have heard tourism isnt to bad now, coming back quite a bit, low A$ and cheaper flights. I saw $169 perth to broome not long ago, havent seen that for 5+years

 

Broome. rightfully should boom. If I were the govt, I would have made plans to populate and massively develop this town.

In reality, WA is a massively under populated and extremely unevenly populated state. Let the statistics do the talking :

WA's land size is 25% more than the whole of Indonesia, yet it has only 2.5 million people compared to 250 million of the latter !! And out of this 2.5 million, around 2 million stays in Perth area, which encompass just around 0.05% of the state's land mass...

You do not need a statistician to tell you this is not a sustainable development. Not just socially, environmentally or economically but also militarily.

The whole of northern shores of WA are so thinly populated that one wonders how we can withstand a sudden and massive invasion of people (military or non) from across the sea. And while Queensland has cities like Cairns, Townsville, Mackay, Rockhampton etc spread over its northern coast, there is non of similar capacity in WA... ZERO. And that is such a waste!!. Broome is just 1.5 hrs flight from Bali and probably just 3 hours from Singapore. With such proximity, it is not going to cost a lot for these Asians to come over here for a quick holiday. Imagine the amount of tourist money WA can make by tapping into such a large source of potential visitors - millions of them! Broome has all the inherent ingredients to be such a market - think of the great beaches, the good climate, the relaxed environment and the cheap AUD now! And it is a greater waste if we consider that Broome has a long connection with Asians, be it the Japanese pearl divers or the Chinese who settled here a century ago. Such cultural attachments are assets that few Australian towns or cities can lay claim to possess. Yet after more than a century of "growing" Broome has only 15,000 inhabitants so far...

If no concrete and determined steps are taken to spur the growth of this town by the govt, I do not think Broome will develop much. Left on its own, Perth, together with some of the southwest towns, will only grow bigger and bigger, but not Broome and the other northern towns, all thanks to the lopsided and shortsighted development strategy of the govt so far. This seems more true now with the downturn in the resource market now and in the foreseeble future.

 

I've recently moved to Vic after spending 3.5 yrs in Broome then Kununurra. Many people buy in both of these towns waiting for the boom. The market's been pretty flat for years despite this, though there are enough government workers who grow to love these towns and decide to settle and buy a house. This keeps the lower to mid end of the market moving reasonably.

Personally if you're paying over the odds for a house in anticipation of a boom then you're speculating so have to be prepared to win or lose money. It really depends on your personal strategy, tastes and risk tolerance. I didn't buy up there as I saw it as too risky particularly given high entry and exit costs associated with property investment. Also very high costs associated with maintenance given local salaries.

 

Property looks pretty cheap their now. Anyone heard anything about a potential military base in the area?

 

I love the concept of your post of what should happen.

The problem is that Broome is really only nice for half the year and because of cyclones it's not that desirable to live there year round which just increases the natural transience of the population.

The other problem is that even with a low AUD and the idea of close flights, Broome is still among the very most expensive holiday areas in that region. You've still got Bali, Thailand, Singapore, Malaysia, Fiji, Vietnam, Cambodia and the rest that all offer similar positives at significantly lower costs (or vastly superior at the same cost). A hostel in Broome costs ~$30 a night, you can get a 5 star hotel in Bali for that just as a comparison. That's just the accommodation as well, the cost of food and drinks is as absurd as the rest of WA.

Even having said that though, there really should be more effort, the biggest criticism I have of the Barnett government has been their inability to even attempt to begin a transition from mining as the "sole provider" for WA. Instead of using the mining wealth (a finite source) to transfer to more renewable type sectors (commerce, tourism, transport, etc) they've just used the money to further expand the mining industry.

The problem with WA tourism will remain the price, we have some great things to offer but our nearest competition are all so much cheaper that it's just hard to compete.

I'd be waiting to see a tangible commitment to developing Broome before investing there though I do love the potential of that area. Cheaper domestic flights would be a fantastic start for the region, again, it's cheaper to fly to Thailand or Vietnam than Broome.

 

Still waiting for the Fitzroy River dam, the cross country water pipeline from Lake Argyle and the LNG plant....!

Too far away, not enough diversity of industries and no confirmed projects......nothing changes.
It is even a hassle to fly there from the east coast.......
Good fishing and outdoor life though......

If you make a lifestyle choice to live there and are happy then it is a good place.
Quiet in the off season - manic in tourist season.
Bit too far away to be dramatically influenced by the mining industry fluctuations.

( I used to work out of Broome/Darwin in pearling industry)