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WA Has Port Hedland hit the bottom?

Discussion in 'Where to Buy' started by Realist35, 8th Oct, 2016.

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  1. Realist35

    Realist35 Well-Known Member

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    Hi all,

    I live in Port Hedland and I'm just shocked by how much the prices have dropped here. The median house price has dropped by 66% in the last four years and apparently the house price is now below the replacement cost. Locals are now buying houses for a quarter of what they used to be.

    I live in a company provided housing so I don't need anything urgent. However some mates at work are of the opinion that this is a great time to buy.

    What are your thoughts?

    Cheers!
     
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  2. hammer

    hammer Well-Known Member

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    Is Port Hedland where you want to live? Or are you thinking as an investment?
     
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  3. Realist35

    Realist35 Well-Known Member

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    I'm thinking of it only as an investment. We will most likely move to Perth within the next 5-10 years and we are currently researching Perth market.
     
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  4. property novice

    property novice Active Member

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    I wouldn't buy there until mining or gas start picking up again. Not for a while IMO. With IP I think its better to buy on the way up.
     
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  5. Realist35

    Realist35 Well-Known Member

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    I was also thinking something along those lines. However my colleagues seem to be adamant we'll miss out if we don't buy now.

    My strategy for Perth is to wait until we see 5-6 months of consecutive price increases and then jump in.
     
  6. radson

    radson Well-Known Member

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    I actually dont think its the worst idea. The lower the price, the less the risk. How are vacancy rates? No use being cheap if you cant rent it out?
     
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  7. TMNT

    TMNT Well-Known Member

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    just curious, other than mining workers, do people actually choose to live there??? understand the local school teacher might, but I doubt a supermarket checkout chic would
     
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  8. radson

    radson Well-Known Member

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    Its not for everyone and certainly not for me but a lot of people genuinely love living in the Pilbara
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I would chat to a few agents to gauge vacancy rates - last I heard it was about 23%. Last time I was up there there was so much construction going on and this is the concern - BHP are roviding their own new housing so who's going to rent an old property in the wrong end of town? Plus insurance costs are astronomical.
     
  10. MTR

    MTR Well-Known Member Premium Member

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    as OP mentioned vacancies are high, and rents have dropped significantly.

    The question you need to ask yourself is when will this market recover? Holding property in a dead market is a poor strategy IMO and mining towns make it a much higher risk proposition. Its not like there are buyers lined up, quite the opposite, people selling and no buyers.

    MTR:)
     
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  11. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    If you are going to always struggle to get a tennant then dont do it!

    23% vacancy rate suggests it will be difficult to let consistentley and as your tennant is your business partner its going to be difficult to "do business" without a partner.
     
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  12. bob shovel

    bob shovel Well-Known Member

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    Yes, as radson said people do like it up there it's a nice spot - great fishing and bush. Not everyone wants to live in a city. There's also local indigenous people that live there.
    Population is around 20k so it's a decent sized town for wa and that brings all the other businesses and opportunities with it.

    Mining booms come and go and the long term locals would have seen it all before, there's usually a nice town behind the "mining boom" tag. It's the grubby subbies that do most damage.
    These towns aren't "pretty" when you're surrounded by industry but you drive 10 min and you're in virgin bush or out on the water so it's easy to escape
     
  13. Toon

    Toon Well-Known Member

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  14. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    I think Perths at 7% so thats not so bad.

    If you can find a property that is in high demand as a rental you may do well.
     
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  15. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I would question that rate - it seems far too low?

    One of the RE's had close to 1 in 4 of their properties empty at one point which is not reflected in that data.
     
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  16. MTR

    MTR Well-Known Member Premium Member

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    Yep and look at the number of listings for rent on realestate.com.au.... its actually staggering and frightening at the same time.

    I guess for a primary residence perhaps a different story, but my concern is when you want to sell, the market is saturated with properties and no one can call the bottom unless they can see in the future, if this is the case.... can they give me next weeks lotto numbers.

    MTR:)
     
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  17. Beelzebub

    Beelzebub Well-Known Member

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    "Looking to move to Perth in 5-10 years" If you're going to live in the house you buy for the next five years maybe. As an investment I'd wait until things pick up again and the trend lines start to swing upward, then I'd consider it, then I'd remember that these towns are very high risk and put my money somewhere else.
     
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  18. Realist35

    Realist35 Well-Known Member

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    Thanks very much guys! Really lots of valuable thoughts.

    I decided not to get into this adventure. Potentially great returns but way too risky. I'm quite risk adverse so definitely not for me. I'll wait instead for a good deal in Perth. It might take a year or two, but I know this is going to be my PPOR one day so it seams like a logical step.

    Many thanks!
     
  19. Yson

    Yson Well-Known Member

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    but how cheap is cheap, because comparing to the peak of above 1m is not appropriate, i have been looking at port hedland, i still think it's not that cheap even at this level.
     
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