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I wonder how these people are fairing?

Discussion in 'General Property Chat' started by smallbuyer, 21st Dec, 2015.

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  1. smallbuyer

    smallbuyer Well-Known Member

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  2. mrdobalina

    mrdobalina Well-Known Member

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    A whole bunch of properties in port hedland in 2007-08, just before the GFC. What could go wrong?
    "The trend is your friend"... And the trend was only going up at that time!
     
  3. flightcrank

    flightcrank Active Member

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    what idiot would pay $1,800 per week to stay in a 3 bed 1 bath home. must be a bloody nice one.
     
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  4. JK200SX

    JK200SX Well-Known Member

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    Not really an idiot, just someone who was getting paid big bucks in the mining or associated industry, and more than likely their employer paying the rent!
     
  5. The Falcon

    The Falcon Well-Known Member

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    Geez. You are aware of the circumstances of the mining boom right?
     
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  6. Dan Donoghue

    Dan Donoghue Well-Known Member

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    how come the table in the article doesn't show repayments?
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    A lot of them would have done just fine - the market there only really crashed last year. For eg, we rented a town house in a March last year for $2000/wk. Now they'd get maybe $500?

    Most of those buyers would have had significant equity in their properties until quite recently, and even if they didn't the rent would have sustained them. It's only the last 12 months that the pain would really start to be felt.
     
  8. MTR

    MTR Well-Known Member Premium Member

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    Most of the properties purchased by this person in the link were purchased during early parts of the cycle, looking at her portfolio. If we look at today - rents and values have dropped back around 25%, she would still be holding a positive cash flow portfolio.

    The investors who would be suffering and some will not recover are those who purchased in Karratha, Port Hedland, South Hedland, Newman at peak, around $800K-1M+, imagine losing 25%+.

    If you check out realestate.com.au you will see that there is massive over supply of rentals and property listings.

    In fact I know that the largest agency in Karratha will not take on any OTP listings as they just don't sell.

    MTR:)
     
    Last edited: 22nd Dec, 2015
  9. MTR

    MTR Well-Known Member Premium Member

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    They wont, not today, no where close
     
  10. HUGH72

    HUGH72 Well-Known Member

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    It was an artificial market with rent mostly subsidized or paid for by the tenants employer.
    The company I work for still has a salary sacrifice rental arrangement for its employees in NW WA. These type of agreements artificially inflate the rental market but as no one wants to buy a property in these kind of places it will continue.
     
  11. MTR

    MTR Well-Known Member Premium Member

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    It still came down to supply vs demand, the mining boom created a shortage of accommodation therefore pushing prices through the roof, companies had to also pay higher prices due to demand that is what the market dictated at that time.
     
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  12. flightcrank

    flightcrank Active Member

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    yeah, which is why i would be pretty damn cautious relying on $1800 rent per week to hold an IP. The "boom" is done and dusted in case you haven’t noticed.
     
  13. Redwing

    Redwing Well-Known Member

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    I'd say the Crawford's are still doing quiet well ;)
     
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  14. The Falcon

    The Falcon Well-Known Member

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    I wasn't aware, thanks for the tip. Keep em coming.
     
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  15. MTR

    MTR Well-Known Member Premium Member

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    I am pretty sure he can live off his portfolio/property income, was featured in API magazine during dizzy boom times and the income/growth he achieved was pretty amazing from what I recall. Perhaps someone may want to dig it up.

    MTR:)
     
  16. ross100

    ross100 Well-Known Member

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    When would be the right time to get back in South Hedland, maybe 3 to 4 years. The rents look fantastic :)
     
  17. MTR

    MTR Well-Known Member Premium Member

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    I am not an expert when it comes to mining towns.
    I did read something about mining boom/bust cycles are much longer time frames than resi cycles?
     
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  18. beachgurl

    beachgurl Well-Known Member

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    A relative of mine was working in Port Hedland around 2009. It was much cheaper for him to buy a property than to rent back then.
     
  19. mrdobalina

    mrdobalina Well-Known Member

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    Like 20-30 years.
     
  20. MTR

    MTR Well-Known Member Premium Member

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    I did not want to mention this, not great