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Gas mining towns?

Discussion in 'Where to Buy' started by JDP1, 23rd Jul, 2015.

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  1. JDP1

    JDP1 Well-Known Member

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    The lng sector is poised for growth

    http://m.brisbanetimes.com.au/busin...dustry-users-20150723-gihx4m?skin=smart-phone

    Wonder if it's time to relook at mining towns..or stick to cities that will get a benefit from gas $ and if so, which ones? I'm thinking Sydney and Brisbane
    Specifically '. bank sees LNG exports tripling within five years to a value of more than $50 billion, up from $18 billion in 2014, lifting GDP growth and restoring a positive balance of trade...'
     
    Last edited: 23rd Jul, 2015
  2. HUGH72

    HUGH72 Well-Known Member

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    After so many investors being burnt in Gladstone, Chinchilla etc You would have to think there are easier ways to make money presently. If the risks were not obvious before they must now.
     
  3. JDP1

    JDP1 Well-Known Member

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    Yeah, full of risk. I'm thinking a small ultra cheapie, just cf stuff for FIFO workers. Not gonna break the bank if it works out or it doesn't.
     
  4. HUGH72

    HUGH72 Well-Known Member

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    Not for me
     
  5. Samten

    Samten Well-Known Member

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    FIFO's usually live in dongers on site not in the town.
     
  6. pinkboy

    pinkboy Well-Known Member Premium Member

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    Provide a current live example please.


    pinkboy
     
  7. JDP1

    JDP1 Well-Known Member

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  8. bob shovel

    bob shovel Well-Known Member

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    The next plants at Gladstone have been put on hold but they are out drilling and putting in more Wells and pipelines. I'd be searching the proposed pipeline route and where the main camps and storage areas will be. But not as big as the last round I'd say. And still risky you need to know when to pull the pin! Ask anyone with stock in Gladstone
     
  9. radson

    radson Well-Known Member

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    I have been flying to Karratha a lot lately and really surprised how busy it is, despite all the doom and gloom articles I have been reading.
     
  10. MTR

    MTR Well-Known Member Premium Member

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    My guess it would be difficult to get finance for these areas as banks view as high risk

    I believe it's not the right time of the cycle to be jumping in, high risk.

    I won't touch this stuff


    MTR
     
  11. JDP1

    JDP1 Well-Known Member

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    I actually do think it's the right time of cycle to go in. Stock has been beaten down, oil and therefore gas prices are low, and the lng industry is looking bright for the future with expected volume increases anf will have price increases at some point.
    Very high risk- yes. But I think what you can get for the buck at this cycle with future industry prospects...gas will be the next big commodity driver, and it's.got some agriculture which is also present in surrounding areas.
     
  12. radson

    radson Well-Known Member

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    I am in the industry and there is soo much supply coming online in the next couple of years, we have Gorgon - Chevron, Browse - Woodside, the Impex in Darwin, Santos and BG in Gladstone, plus PNG , Indonesia, Abu Dhabi, Malaysia, Qatar, the list goes on and on. Yes, the demand is there but whooa a lot of scuffs coming online to feed that demand.
     
  13. MTR

    MTR Well-Known Member Premium Member

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    Ok, so let's assume you are right about what may happen to these areas in the future, however what's happening at the moment ie number properties on market for rent and number of properties for sale, and how long on the market.

    Is there currently oversupply, so if you buy now will it rent straight away? If there is an oversupply prices may continue to fall, this is what is the norm and rents also fall. Vacancies Could stretch for months, goes from cashflow positive to negative


    We are seeing mining areas in free fall, rents down 25% and 25% falls in values of properties and no vendors? Market sentiment is not good, oil and gas, mining

    At the end of the day I would be looking at what is happening on the ground today, and ask yourself do you believe it's a good idea to jump into a falling market, easiest way to lose money

    we Are not certain what will happen 1, 2, 3 years time, no one knows, we can only work on today. I would only consider jumping in if I saw positive signs that the market was starting to rise, and rents following this pattern
     
    Last edited: 23rd Jul, 2015
  14. pinkboy

    pinkboy Well-Known Member Premium Member

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    Perfect example thanks.

    Hypothetically, things go well. People start moving there etc. 2000m block standard for the area. Zoom out on the map - how many 2000m blocks can be created? 1000s. No demand for land, therefore prices stay low/equal.

    Hypothetically, things turn to custard. What's your exit strategy?

    Is it really worth it for a bit of cash flow?

    pinkboy
     
  15. MTR

    MTR Well-Known Member Premium Member

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    Nope
     
  16. pinkboy

    pinkboy Well-Known Member Premium Member

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    Exactly

    pinkboy
     
  17. HUGH72

    HUGH72 Well-Known Member

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    Agreed, we are all probably generalizing talking about different projects across northwest WA,NT and QLD but all have had high levels of speculative investment.
    High risk and possibly not even close to the bottom for some of these places.
    Why even consider it? It least the banks are now stopping some people from themselves by caping LVRs for some postcodes apparently.
     
  18. JDP1

    JDP1 Well-Known Member

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    Hmmm...good points....lots of opposition to mining towns ; not one response for it.
    I think the risk adjusted opportunity cost is probably a bit too high for me at this point...Surely there is something else more palatable.
     
  19. MTR

    MTR Well-Known Member Premium Member

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    Hugh so right
    I have a g/friend who purchased 3 properties around $900k each , Karratha, south hedland and Newman, 25% falls across each propery and same with rents, she purchased when the market peaked

    An absolute train wreck, and they can not sell. Major re agent in the area won't take certain properties on because there are no buyers.

    Lots of pain


    MTR:)
     
  20. JDP1

    JDP1 Well-Known Member

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    The thing that really put me off was the difficulty in getting out..ie very tough to sell.
    Last thing I would want is being desperate to sell and taking big haircuts on price to move the stock.