WA Karratha?

Beware of my US presidential predictions before taking me seriously...but...

Looking at Karratha today...vacancy rates have fallen to 4%. Yields are 7-8% and prices have fallen ~60% and stabilised.

 

Don't all knock me over in the rush.......

 

Personally I wouldn't touch those types of towns with a 10 foot pole. It's just playing with fire. Very few people really understand the markets of those types of investments myself included, but I know enough to know it's not for most people and if you do decide to buy into there then you will have to have a serious plan for it to fit into your portfolio and exit strategy. I strongly believe its not for most people. Just my opinion.

 

Are those stats reliable?? Sounds ok.....*

Do you work for positive real estate or Crawford?

Prices look sensible and with the vacancy rate looks reasonable. Does trump want gas?

Perhaps everyone has jumped ship and the dust settled quicker than expected?

The only thing it may be some time before cg comes to town. Definitely not getting 60% back soon id say

 

There are a lot sales going through low 90k,prior sales who knows in QLD where self funded grey nomads are buying in slow down mine towns central qld locations just to have a place to park service the RV and use as a base,with the price of Coal going upwards and for the entry non rental price..

 

I agree. Its a high risk play and should be viewed as a speculative investment by someone who can afford to get it wrong.

 

I might have to report you for spruiking capital cities! Look what happened in the US, regional towns took over. They have feelings to

 

Its complicated. but I am of the mindset that it is less risky to buy an asset that has dropped 60% in price (Karratha) than one that has risen 60% (Sydney)

 

I like your logic

The problem you have is finding the right advice.
95% of people here would avoid it like the plague with it being <100k, regional, "mining town" but mostly because they don't understand the ins and outs and there are easier, safer buys out there. All fair enough

I think you'd need to look at why the vacancy rate iswhere it is and what it has been doing and why. Are they closing fifo and moving guys into town?
Also what boomed and busted it.
Has construction work moved on and setlling into operations.

I'm not really familiar with the town but it's 20k and doesn't just have "1 mine" there's a variety of stuff going.

Future growth may be a while off if it's settled in it may need another "mining boom" to kick it along

Hopefully someone with experience with the town can help you more

 

I might have to change my signature to Capitalist Spruiker....

Really though I don't have anything against regional towns, mining towns, capital cities etc etc, for me its all about growth drives/risk/goal achievement. I also wouldn't invest in a town/city that just had massive growth either, although that too depends on individual strategy and goals. So much of this is tailed to the individual however I think common themes that need to be kept in mind is risk/growth/ and yield, with risk in front for everyone.

 

So just some numbers behind what I'm talking about according to SQM

Falling vacancy rate (albeit volatile)



Rising yields as a consequence of massive price drop



Stabilisation of house prices - Is the worst over? Iron Ore prices up 70% this year according to @petewargent Pete Wargent blog: Shorts pulled down again

 

Spot Coke is at 300 pesos. Boom price.

pinkboy

 

Have a look at Moranbah....everything pretty much under $200,000 is under contract. But you cant rent the places. Maybe if you were going to work in the town or mines there it may be time to take a gamble if you have money to spare all depends on your risk profile and if you think China will start opening up their mines again.

 

I think Moranbah and Karratha are different beasts. Karratha is a regional centre with double the population and much more diversified..plus the thing that caught my eye is the relatively low and falling vacancy rates.

 

@radson FWIW, I think if the numbers are making sense to you and it fits your risk profile then why not go for it? If you forget the noise and focus on the numbers it does start to look attractive. I can see why you would be tempted, particularly if you are at a stage where you can absorb a little high risk play.

 

What's the story worth fifo there? Did they get the balance of fifo and relocations right or just demand increased and they didn't go crazy building?

 

I was just using Moranbah as an example of renewed interest in mining areas. 6 months ago not much was selling now it looks quite different. The QLD government push to limit FIFO could be positive for the town as well.

 

REIWA article today

Sales Activity Up, Listings Down In Karratha Property Market|Regional WA

 

Very pertinent questions.

 

One more question. .... what does pertinent mean?