Gas mining towns?

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...'

 

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.

 

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.

 

Not for me

 

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

 

Provide a current live example please.


pinkboy

 

stuff like this
http://www.realestate.com.au/property-house-qld-wallumbilla-107026059

could fit a couple of miners/related industries or a miners visting family. 2000 sqm seems ok to me..

 

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

 

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.

 

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

 

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.

 

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.

 

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

 

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

 

Nope

 

Exactly

pinkboy

 

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.

 

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.

 

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

 

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.