Timing of Gladstone sale - HTW says market picking up? Performance Data say no foreseeable growth

Hi all!

As you may have read in another thread - I'm just about to list one of my poison Gladstone properties for sale. I paid $600k for this at the peak in 2012, expecting around $330-340k.

The general consensus on the PC forum is to sell and move on (opportunity cost, mental health benefit + no foreseeable growth prospects), although I just read HTW just came out with their new report, saying that the market has just started to pick up (although their predictions are 'gut feel').

The market has been described as 'patchy'.

Vacancy on SQM has just dropped down from 4.x to 3.4%, which is amazing. First time I've seen a 3.x in over 5 years! (it was at 12% once!).

Would it be worth waiting 12 months before selling or just sell and moving on and up?

They are costing me $20k per year in negative cash flow - so they'd need to grow by say double that within 12 months.

I'm still leaning towards selling. Thoughts?

 

I've spoken to a few people living in some of the surrounding mining communities and it really does sound like things are picking up. Rents are rising and going quick, which is making renters look to buy while housing is cheap. It's interesting to see! Similar in Port Hedland too - renters leaving the rental market to buy homes.

 

I'd ignore anything that htw says

 

^ ^ this. Having said that, I’m not advising you sell or hold either. Chances are you have come through the worst of it and then you sell just before prices recover.

 

It might have flatlighned. But it might be just a blip. With these towns you never know what the heck is happening.

Unless there is a huge commitment from a mining company for some mega project, I’ll not hold my breath.

 

Yes, I think you've been through the worst too. Talk of mining picking up. Talk of personnel shortages .... sound familiar?
Not advice.
Good luck with your decision.

 

Using $330k as the property value what would be the net yield ?

 

What new developments are planned for Gladstone in the next 12 months? Virtually none... Buyers beware the dead cat bounce in mining towns.

Gladstone in particular was massively over supplied thanks to the new construction accommodation built in the region.
I can't see prices rising in most suburbs, maybe the desirables will get a boost, but don't expect a ripple effect. There's not enough permanent high paying jobs comparrd to available housing to support much capital growth.

If you're a yield hunter and buying now it might be a different game?

 

I'm getting $350pw gross on this property (5.5%).

 

What is the net ?

 

Keep an eye for Gladstone job ads, a Spike could signal a big new project coming in

 

How'd u go with the sale @Orion? Anyone in the ground seeing an improvement in value or hearing of any project announcements to suggest holding? With Melbourne & Sydney going backwards & tougher lending I wonder if that's positive & appealing for the discounted region?

 

Yes quite a bit of talk of mining picking up

 

Still waiting for the tenant to vacate. They wouldn't allow trades in to quote on the repairs for sale. Should be on the market in 2-3 weeks.

Murphy's law it'll boom after I sell :S

 

That's exactly my fear.. I'll get out 150k poss then it grows.. Big crystal ball question is where the 80k unit I have that was 250k will be worth in 3 years time.. If someone said 130k+ it would be worth holding .. Otherwise quit the bleeding & move on?