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Kalgoorlie Joins the Bust; Investor Woes. Prices and Rents Smashed.
Topic Started: 20 Aug 2014, 07:31 PM (2,535 Views)
newjez
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Jimbo
20 Aug 2014, 08:08 PM
But Perth is so much more than mining.

It has mining services, sales of 4WD's to people who work in mining, places for people who work in mining to get pissed at $13 a pint, RE agents to sell investment properties to people who work in mining and other stuff as well.

No problems here.
Don't forget the boat!
http://www.boatsonline.com.au/perth-boats-for-sale%3Faction%3Dadv_search%26hull_material%3DAll%26new%3DNew%2Band%2BUsed%2BBoats%26cate%3DAll%26price_from%3D1%26price_to%3D1000000000%26state%255B%255D%3DWA
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Mike
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Perthite
20 Aug 2014, 10:54 PM
Port Hedland Median down 510k from peak.

Wonder what the real value is. Something tells me we will find out soon enough.
It will fall further so will other mining towns.

Karratha will be hit hard as well, as they are adding a lot of supply in land and houses just as demand is dropping away.

I feel sorry for those people sold into buying 4x2 at $1.5 million a pop due to the high rents, but when you do the math you need those high rents for decades to pay down the property with such a large outlay. You are reliant on economic conditions at there peak reaming so for decades.

Mining towns are never a good investment in my mind with the exception if you are in early and sell high to people wanting to get in late, you can make a lot of money then.

If mining towns keep falling, Port Headland down another $500k then it might be a good buy, would not take much to send prices soaring again. If you like to gamble buy in regional or mining towns.
http://mike-globaleconomy.blogspot.com.au/
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John Frum
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Mike
21 Aug 2014, 09:36 AM
It will fall further so will other mining towns.

Karratha will be hit hard as well, as they are adding a lot of supply in land and houses just as demand is dropping away.

I feel sorry for those people sold into buying 4x2 at $1.5 million a pop due to the high rents, but when you do the math you need those high rents for decades to pay down the property with such a large outlay. You are reliant on economic conditions at there peak reaming so for decades.

Mining towns are never a good investment in my mind with the exception if you are in early and sell high to people wanting to get in late, you can make a lot of money then.

If mining towns keep falling, Port Headland down another $500k then it might be a good buy, would not take much to send prices soaring again. If you like to gamble buy in regional or mining towns.
This is just the tip of the iceberg. Regional and mining towns first, then Perth will eventually get slammed.

Which will be the canary in the coalmine for the east coast; it gets its emporer's new clothes moment when it finally dawns that most of its entire service industry was built to cater to the wealth generated from the west.
Edited by John Frum, 21 Aug 2014, 10:10 AM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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John Frum
21 Aug 2014, 10:08 AM
This is just the tip of the iceberg. Regional and mining towns first, then Perth will eventually get slammed.

Which will be the canary in the coalmine for the east coast; it gets its emporer's new clothes moment when it finally dawns that most of its entire service industry was built to cater to the wealth generated from the west.
Exactly john.

They have all been sold the lie.

Buy now or be priced out forever, prices double every seven years.

The reality, get out now, before its too late, prices are more likely to half in seven years, not double.

And yet they are still building like no tommorow in perth.

More and more property.

Less and less jobs.

Rental vacancies to the moon.

Rental prices to the floor.

Wont be long before investors start jumping in large numbers, not so much because the overwelhming evidence is clear, but because they will no longer be able to service the lone.

The start to understand the real negative in negative gearing. ;)

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SittingOnDeFence
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Steve99
21 Aug 2014, 08:16 AM
The article quoted

''Two years ago in Port Hedland, the median house price was $1.5 million. High rents linked to high demand in the pivotal port town created around a 10 to 11 per cent rate of rental return for savvy investors.''

How come every speculator is called ''savvy investor'' regardless of the outcome? Every single potential rentable property around where I live in Melbourne is marketed a suitable for the 'savvy investor' not the dickhead that wants to go feral with his SMSF or the get rich quick Cword with a paint brush.

My interpretation of RE adds runs as such:

' Lucky Dickead wanted, no money sense required'
Rundown poorly built shack for sale,
A unique one bedroomed donga, only of only 50 on the block
Cant go wrong.
only at the unrepeatable price of
offers over $750K+++
inspect Saturday 11am - 11.05am
I agree - however I'd also add "FHBs some and have a go if you think you're hard enough"
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zaph
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John Frum
21 Aug 2014, 10:08 AM
This is just the tip of the iceberg. Regional and mining towns first, then Perth will eventually get slammed.

Gold and Sunshine Coast first, then Brisbane - oh wait!
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Its the oil and gas sector that is screaming out for people now. The problem is it's hard for people who specialise in minerals to switch to o&g. With Apaches huge find in the Carnarvon basin there is plenty of work coming up for people willing (and capable) to make the switch.
As for the regional towns the downturn is well and truly in. Those who saved during the boom should be looking to take advantage of this. The question is are you savvy enough to pick the bottom and do you have the balls to put your money in.
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Jimbo
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21 Aug 2014, 11:55 AM
Its the oil and gas sector that is screaming out for people now. The problem is it's hard for people who specialise in minerals to switch to o&g. With Apaches huge find in the Carnarvon basin there is plenty of work coming up for people willing (and capable) to make the switch.
As for the regional towns the downturn is well and truly in.
Is O&G screaming out for people?
I'm not seeing that. The opposite to be honest.
Gorgon and Wheatstone have sucked plenty of talent into WA and both of those projects will be will be winding down their construction phases before anything happens with the Apache find.

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Jimbo
21 Aug 2014, 12:07 PM
Is O&G screaming out for people?
I'm not seeing that. The opposite to be honest.
Gorgon and Wheatstone have sucked plenty of talent into WA and both of those projects will be will be winding down their construction phases before anything happens with the Apache find.
Plenty of work, the construction side is an easy switch it's engineers and geoscientists that are needed most.
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szokolay
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zaph
21 Aug 2014, 11:02 AM
John Frum
21 Aug 2014, 10:08 AM
This is just the tip of the iceberg. Regional and mining towns first, then Perth will eventually get slammed.

Gold and Sunshine Coast first, then Brisbane - oh wait!
Are the gold and sunshine coasts regional mining towns??? They are regional theme parks for drug addicts is all. The gold coast came back after a big slump decades ago because there was still room to build hirises and suburbs and because the culture was acceptable. Now neither is true and I can't see it ever coming back to boom again.

Besides, a few meters of sea level rise we are expecting next decade or 2 will put a lot of it under anyway.
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