SA South Australia next Detroit

Did anyone read the article by Jason Murphy on news com au about South Australia becoming the next Detroit ?
The Steel mills in Whyalia are set to close ,Holden is closing soon .

in different parts SA maybe going down in prices and becoming slums... I hope Whyalia goes right down so i can invest.

I dont know how to post the link
Australia’s very own Detroit

 

Wouldn't have invested in Whyalla anyway, its a few hours drive from Adelaide and is a 1 industry town. Its well known that this kind of investment ends in tears.

 

The article should've been 'Whyalla the next Detroit'. As the author mentioned most people at Whyalla will be stuck there as they have emotional ties to friends and family. That or financially they won't be able to afford to just pack up and move to Adelaide.

 

The exact opposite could well happen,never pays to think too much into or the analyses of people who talk about something they know nothing about,better just translating into simple logic,Holden been against the wall for a long time,Steel Mills worldwide are all in the same boat..

 

If Wyhalla goes down ..it will be good for Adelaide as people move there for jobs. The feds are already planning to put money in some of the industries based in Adelaide. Not everyone will want to move from Wyhalla to interstate.

 

Yes because Newcastle became a detroit slum when BHP closed like many predicted...oh wait

 

Well they can come to Mt Druitt.

We'll welcome them with open arms. Just bring ya redundancy cheque with ya!

 

"in different parts SA maybe going down in prices and becoming slums... I hope Whyalia goes right down so i can invest."

The lack of logic here is breathtaking.

 

I completely agree with this but then again action speaks louder than words. It's easy for anyone to say they are buying heaps of properties in regional Australia and have nothing to show for it.

 

Get your own dole bludgers! These are ours !

 

Logic is the same as those investing in distressed debt aka vulture funds. Distressed securities - Wikipedia, the free encyclopedia. Try Carl Icahn or Oaktree. In the case of Whyalla it could have been GSO Arrium's financial backers reject billion-dollar recapitalisation plan. It will be very interesting how the Arrium debt is managed. Someone will make millions out of it.

In this case the OP is buying equity of the distressed asset knowing/hoping the asset will rise in value:- core tenant of contrarian investing. Riskier than buying distressed debt IMHO but still a valid investing approach. Maybe the OP knows (pounds for pennies) or expects something others do not.

 

No problem with contrarian view or buying distressed assets, you hit the nail on the head when you said knowing/hoping. No one can know what is going to property prices in Whyalla and the fundamentals wouldn't appear to support CG, thus it is essentially the same as throwing some $ on a roulette wheel. If the amount you throw is minor compared to your overall position then who cares, if however losing on that throw will burn you badly then I wouldn't suggest throwing!

Agree that it is a valid investing approach, but I'd say it is a sophisticated play and would need to be a manageable level of the overall portfolio.

 

On the flipside of Whyalla, Port Augusta etc. Is (In my humble opinion after initial reaearch) Adelaide.

Download the last couple of Ironfish reprts on Adelaide's economy and the short-mid term outlook or it.

As the autos and mining move out, in moethe Internet-of-Things based businesses (nely a significant play by Cisco), as well as a comparable upswing in tourism tl Tasmania's recent lift in Tourism revenue (and people) numbers.

I don't doubt Adelaide is still a flight risk for property investment but if you buy well there, and couple this with the lack of open land available (at least in the east, west, and to some degree, the south), amd it might be enough to keep it afloat. Some well-bought properties in the right suburbs could actually thrive.

Also consider the visa incentives for new-to-Aus arrivals to settle there.

 

Some areas of Adelaide, ie western/eastern suburbs as well as north and south areas within 10k of the city have a high chance of staying strong even if other areas turn to ghettos.

That is because 10k from city have strong owner occupier appeal.

 

Ironfish sell property, take any reports they commission with a pinch of salt.

 

What jobs ? I know plenty of migrants who went to Adelaide and didn't like it couldn't get good schools, decent affordable accommodation, jobs or decent well paying jobs or lost their job, so they moved over the border to Vic. Cant even get decent water in Adelaide, it is every-one elses dregs, tastes as bad as the SA beer, and its supply will limit growth.

 

I take it that you don't like Adelaide?

This is the 21st century and we're going through a fundamental shift in the way the economy, industry and people run their lives. Adelaide and South Australia will go through these changes, no matter how much feet stomping and hand wringing is made - and it will do better from it especially if key stakeholders focus on what is needed for FUTURE, than the PAST.

 

Agree SA economy is not so great the moment...so jobs are an issue...but in terms of lifestyle and affordability it is pretty good.

Once the economy there transitions it should do alright.

 

The #1 question clients ask me as a BA is "how is the tap water currently?".

 

Most important thing is you are prepared with the right answer .... ..LOL