Real Pain - Australian Mining Towns

So I regret NOT buying in the US when the chatter was all about ATL (was working in AU for a company HQ'ed in ATL) and I have NO regrets about NOT buying in PH. Remember when the Crawfords were in every second API?

Slow and steady over here, so no booms, but also no busts!!

 

thanks for the post @MTR, what an eye opener. feel sorry for people who bought into these areas at the peak.

 

I did see many advertisement pushing the high yields ...but i only focus in main cities

 

Only from people that i have talked too who have bought in Moranbah over the past six months,and they never paid more then 100k complete high set 3 bed nothing to spend,they are not worried about renting them they just think that the price of coal,and as there various location within a central radius of Moranbah of above high grade coal in the hands on India Based multi nationals,just another market within a market like corner blocks..imho..

 

No, there are far better options than buying in mining towns today

 

Crawfords bankrupt now

 

I remember I saw the news, it was 2 ppl n expanded to 80ppl n bankrupted now

 

maybe true! but remember loads of gurus specifically recommended Gladstone, it was on '"just about every hotspot list" of 2012

 

I live in Port Hedland and I have witnessed many sad stories. My work mate bought a 650k house at the peak, that was leaking and it was generally in a very bad condition. He says he would be lucky if he can get 200k for it now. So he just keeps renting it out and bleeding a lot of money.

Another work mate of mine just bought two houses in South Hedland, ~170k each (I believe they used to be worth 500-600k each). He's looking into buying a third one too and every other day he tells me I'm making a big mistake by not buying. He might be right but I prefer to be safe and will always invest only in capitals.

 

I was recently sourcing commercial space in PH - no discount there due to scarcity. Definitely not cheap windowless space.

 

Hate to say "markets within markets" but gladstone does have a number of them. All taken different paths. I think the numbers are lagging quite a bit to. There's a good 30% knocked off but in some area's more.

I'll see what i can screen shot to share but some of the suburbs are
South Gladstone
West Gladstone
Telina
Clinton
New Auckland

Some haven't taken as much of a hit as others, some don't look like mining towns others bigtime boom and bust.
One suburb i looked at showed yield going from 6% up to 8% but when matching to median went eg. 300pw up to 650pw and the lah of data isn't showing but would be now 200pw

Also population needs to be added in to the equation
Gladstone is 50k while the others are sub 20k

 

Why ur work mate buy in south hedland for $170k?

 

It's timing... those who purchased in wa mining towns in 2001 beginning of the boom were buying at around 160-180k with huge rents made a killing

4 bedroom homes at peak were renting in Karratha for as much as $1800+ per week

 

Hi @MTR. I agree it's timing. You have to time your entry and exit points with a high degree of precision. Most are no good at choosing their timing.

 

If loads of gurus are recommending something that too should be a red flag - most of the action has already passed by then. I find most hotspot lists to be laughable these days.

 

1. Bad if you bought at the peak and now gone back.

2. Okay if you bought before the boom and held and they are worth the same as before.

3. Great if you bought before the boom and sold at the peak.

4. Below average if you bought before the boom and it still hasn't boomed.

If you can repeat number 3 you will be mega rich but if you pick number 1 you will be bankrupt pretty quickly.

This is mining towns for you, if you get the timing right jackpot but if you get it wrong disastrous. If the time doesn't happen then you have wasted opportunity.

 

But there are so many mining towns in aus, I guess it's a luck to buy before the boom

 

Interesting topic and my attitude is swings and roundabouts I own 2 properties in mining town but that town heavily relies on welfare and government so will always will be jobs for gov workers and this place will never change in regards to that.
Sure I'd much prefer to own in capital cities but the amount of money I had wasn't enough

Each place is so different it's hard I really feel for people that were trying to do something and make some money and failed

 

I haven't looked into it but you might improve you luck following where exploration licences are being done.

Not sure if this would give you good results but it can make sense if there is a lot of exploration and you buy before there is any announcement I would think you would do well.

However if they find nothing you have ended up with a meh property and hopefully you can either hold until they came back again or sell it at no loss besides costs (stamp, rea fees etc).

 

For every person who got burned buying at the peak of the market in a mining town there is a vendor who made an awful lot of money!!

Friend's son bought a house and doubled his money in a couple of years in Gladstone before selling when moving back to Brisbane. Just blind good luck, both moves were work transfers!
Marg