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Extent of Mining Town Despair

Discussion in 'General Property Chat' started by C-mac, 5th Sep, 2016.

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  1. C-mac

    C-mac Well-Known Member

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    Caught this listing and what a sad state of affairs:

    5 Edkins Place, South Hedland, WA 6722 - Unitblock for Sale #123481774 - realestate.com.au

    I couldn't imagine a worse position to be in. Having to sell at a loss in a mining town that has wound down, is bad enough.

    But to be halfway through an 8-pack of units (all teeny tiny studios that were no doubt built solely for FIFO workers, who have long gone) and trying to sell is just wow.

    I feel awful for the (most likely to be) small-time developer having to put this half complete project up for firesale at this awful stage of the Port Headland / 'insert generic mining town name x here' market cycle; for what is no doubt a massive loss. Something like this can utterly financially cripple someone. Money may not be everything in life but a blow this big... its gotta hurt. My heart goes out to this person/people who had the best of intentions but got it so wrong.

    But at the same time; I think it is so important for both aspiring and experienced investors alike, to be confronted with stuff like this. Property investing and small-developments like this aren't a no-risk endeavour. You cannot just buy anything, anywhere, without doing proper research and data-crunching. The investment with property is really one part 'your money' and two parts 'your brain, your time, and your hunger for wealth creation'.

    We need to see stuff like this sometimes to ground us and remember that the perils in property are very real and (can be) financially destructive.
     
    Kate Moloney, HUGH72, wategos and 2 others like this.
  2. Joynz

    Joynz Well-Known Member

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    Even sadder - the 'recent sales' listing at the bottom of the ad has 2 bedroom unitsfor almost $600,000. Back in 2014 or so.
     
  3. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Can't like this... :(
    but thanks for the share.
     
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  4. hammer

    hammer Well-Known Member

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    Thanks for sharing! It's good to be reminded of the scary stuff.

    To be fair to the vendor, or anyone who got caught up in the mining boom, It was hard to resist jumping in. A few years ago, I would have bought ANYTHING to stop bleeding rent. It was horrible. Our rent went up 20 percent in one year.

    Then there was all the talk on the street of people making millions, lots of shiny new cars, new businesses....It was like the whole town was buzzing with electricity....It's exciting, seductive and so easy to get swept away by it all.....

    We're all human.

    I wish the vendor the best of luck.
     
  5. TMNT

    TMNT Well-Known Member

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    so they are selling a half completed block?
     
  6. MTR

    MTR Well-Known Member Premium Member

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    Some did make a killing, those buying at the start of WA mining boom 2001, entry level at that time was around 150k.

    median house price Port Hedland and Karratha in 2012/13 was around 900k, the writing was in the wall. The lure of cash flow unfortunately.

    I feel terrible very sad

    Did anyone read @Kate Moloney story on Moranbah

    MTR
     
  7. MTR

    MTR Well-Known Member Premium Member

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    trouble is there are no buyers, oversupply, who will be renting, when jobs have been slashed
     
  8. Casteller

    Casteller Well-Known Member

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    I´ve got no idea about Port Headland but time to pick up a bargain ? Times of despair are often the best buying (sorry about the sellers though). I've got a few bargains in the past in times of despair, Sydney and London mid 90s, north coast NSW 4 years ago, Spain in the last few years.
     
  9. Archer

    Archer Member

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    Mining cycles can be very long - might be 20 years plus for the next upswing!
     
  10. Yson

    Yson Well-Known Member

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    Indeed, when something is too hot, we got to be careful, when it was 150l few yr ago n gone upto 900k within few yrs, I remember those days when magazines all had stories on mining.
     
  11. Biz

    Biz Well-Known Member

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    To be honest it's hard for me to feel sympathy for people who lose money in investing and business. It's just part of the game. For someone to make money someone has to lose it. To really excel in investing and business you have to be prepared to lose what you put in.
     
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  12. MTR

    MTR Well-Known Member Premium Member

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    If you think buying in mining town today is a great idea you need to visit Western Australia as the property market in general is falling, not just mining towns, mining boom is over and we have nothing to replace it. Our economy is weakest in Australia with many losing their jobs and business' closing doors.

    Mining cycles are much longer than property cycles and having a property vacant most of the year does not generate cash flow.
     
  13. MTR

    MTR Well-Known Member Premium Member

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    Investors lose money with resi property as well, its a property forum we are only going to read about the good stuff. Buy at peak and you will left holding the baby, recovery can take years.
     
  14. Biz

    Biz Well-Known Member

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    I know all about it! Just sold one I held for 13 years at only a small profit.Would be a loss if I factor in it was negatively geared for most of that time.

    I may need a cuddle...
     
  15. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    The more frustrating aspect is when people lose money then look at everyone else to blame for their loss except themselves. It was the lenders fault for lending them money, the sales agents fault for selling them without telling them the market was about to tank, it was the neighbours dogs fault for barking during the open home etc etc. Never their own greed or lack of due diligence or tracking the market their investment was in.
     
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  16. TMNT

    TMNT Well-Known Member

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    Agree. And if the investmwnt does well then they automatically label themselevs as gurus or experts or skillful investors
     
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  17. TMNT

    TMNT Well-Known Member

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    Is it just me but i dont think mining towns follow cycles.

    Eg property grows at an average rate if there is nothing pushing it down or up.
    With mining towns the next big project or find will boost it

    Without any improvement or prospects the market just stays flat or even starts going down due to lack of confidence.

    Other than a tiny cpi increase . I find it either stays completely flat/goes down or booms.
     
  18. HUGH72

    HUGH72 Well-Known Member

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    Great post, it's easy for one to get caught up with making $xxx and sometimes risk isn't evaluated carefully enough. One boom and everyone's an expert.
    The sobering reality is there would be thousands of investors in this sort of situation with little wayout other than bankruptcy.
     
    2FAST4U likes this.
  19. Yson

    Yson Well-Known Member

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    Mind to say where it was?
     
  20. Biz

    Biz Well-Known Member

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    Port Stephens area.