Forum Replies Created
http://www.cqnews.com.au/story/2012/06/08/qr-network-expands/
This article is about a possible rail link from Alpha to Emerald to send some of the Galilee coal to Gladstone. The Galilee Basin is attracting a lot of attention.
Hi jnb and mattsta
Below is the title of a thread Josh started. He provides a link in it to his blog. An excellent summary of what's happening in Mackay is on his blog. I've been to Mackay twice now, and have purchased there myself. The area around the CBD is very low and flat. I bought on a hill near the water tower on the border of the suburbs of North Mackay and Mount Pleasant. Mackay gets torrential rain. Be careful of flood prone areas. North of Mackay there are some good elevated suburbs, but they are very spread out and distance and travel times to CBD increase. I wrote a short summary of my first trip to Mackay on another thread. Search "Mackay" and you should find it.
QLD mining regions (Bowen & Surat Basins & Gladstone): Willing to help anyone with questions
In regards to the suspension of the Alpha project, Tony Burke, Fed enviro minister, has stated that he wants more information pertaining to potential reef damage from runoff. While most of us obviously are not privy to the details of what information is available on the subject, or to how diligent the studies have been, the premise that comprehensive information should be submitted seems reasonable, The shame of the situation, it seems to me, is that once again the governments of this country have failed to communicate and work together in the joint interest of all involved. Before announcements of this scale, with the inherrent potential impacts are announced, surely all interested and involved parties should come to consensus. Instead we have one level of government make a grand announcement, only to have another nullify it, then the first make another related big announcement, and now we wait to see what damage the federal government will follow up with. We can obviously expect more insults and political threats to follow. No wonder business and investor confidence is low. What a pathetic circus.
Here's a link outlining some of the offsets which have been required to compensate for enviromental damage expected from the Gladstone LNG projects.
http://www.gladstoneobserver.com.au/story/2012/06/05/environmental-offsets-lng/I haven't seen the recently approved Mac camp for Moranbah mentioned anywhere on the forumn yet. Here's a link for an article about it in the Mackay newspaper. The comments below the article are also interesting and enlightening. http://www.dailymercury.com.au/story/2012/06/05/council-slams-mining-camp-anne-baker/
Hey Dubstep, that's a Great article. I love Terry's positive attitude. I think it was him that first came out with that saying "watch what the mining companies do, not what they say". And on the subject of making property investment decisions based on long term factors, I couldn't agree more. The daily wild gyrations and frequent dramatic reversals of international and local stockmarkets clearly demonstrate the degree by which the average "investor" allows himself to be influenced by the vaguest of news about the state of global and local economies. As Terry suggests, the best approach is to base decisions on individual appraisal of the longer term outlook, filter short term noise, hysteria, panic, and over-dramatised negativity, invest accordingly and stick to your strategy. I'm glad I've invested in Queensland, including Emerald, Mackay and Gladstone. And I'll continue to do so. Here's an interesting link to an article in the Emerald newspaper related to the plans for rail in the Galilee Basin.
http://www.cqnews.com.au/story/2012/06/01/farmers-in-a-frenzy-over-mine/hi Uanwin2
First of all, you need to do more research. A good place to start would be to read Portfolio PI thread "Queensland mining region….willing to help." From there go to Josh's blog….there is a great review on Mackay, which amongst other things has a comprehensive list of projects around Mackay. I, and obviously many others on this site, have found Josh's information and insights very informative and accurate. But you should do your own follow up research, contact council, check Government sites listing projects, study flood maps, compare advertised prices for purchase and rent of properties similar to the one you're interested in, check local newspaper on Line http://www.dailymercury.com.au/ etc. Then, if possible, go there before commiting, have a look around. A lot of the town is flood prone, obviously something to be considered.
I bought in Mackay recently. Established and renovated 4 bed 3 bath house. Now managed by Mackay rentals- so far they are doing a good job. Paid $455,000 for house, rent of $700 p/wk unfurnished.
At first glance, entry price and rental appraisal you mention sound a little high. Compare. Also long time until completion… a lot can happen before then, including delays. Mattnz is right that second bath holds a lot of appeal for contractors and miners sharing accomadation.
Economy in Mackay is diversified and pumping right now. Obviously benefiting from mining, but many other "pillars" supporting the town. Vacancy rates tight, rents high. Easier to get accomadation in hotels and motels on weekends than during the week because the miners and contractors book them out on weekdays.
I will be in Mackay for business and pleasure, mostly the latter, for a week from !8/5/12 (this friday). I would be happy to look at the area of your proposed unit, or other properties you might be interested in. Happy to help anyone else interested in having someone on the ground to check things out. You can PM me.Cheers, Tony
NAB chief economist says the previous two rate cuts didn't help the housing market, so he's dubious about the prospects of further rate cuts having a positive impact (what a fool). He neglected to mention that the banks didn't pass on the previous cuts in full, and subsequently raised their rates independently of the reserve, thus stomping on any prospect of positive sentiment improving as a result of lower rates. The banks should do themselves a favour and pass on the rate cuts in full, which would no doubt result in them seeing greater demand for their loans. Can they resist the greedy impulse to pocket some of the cut?
waydo77 wrote:hey moxi10, did you go throiugh a buyers agent at all for the mackay property?Hey waydo
I did it the hands on way. Took a few days off work, flew up from the central coast NSW and hit the ground in Mackay. Pretty happy with what I ended up with. House now tenented at $700 p/wk.
"Coincidentally" the latest advertising campaign by the mines against excessive government taxes adding to the oppressive burden of costs associated with operating mines in Australia resulted in full page ads in The Australian one page away from articles about Norwich Park being closed. BHP Strategy…. leave some coal in the ground temporarily at Norwich Park=money in the bank. Force some employees to transfer to other short-staffed company mines= break the spirit of the strikers. Park and transfer machinery to other sites where it's needed, shut the mine temporarily, initiate new advertising scare campaign= leverage against more taxes, supply Coalition with additional ammunition to use against Labor government, fool the populace into being more supportive of big miners, and further dampen the local over-heated housing market. None of this costs BHP much, and they stand to benefit from it in several ways.
The good thing about this from a property investor's viewpoint is that none of it really alters the fact that coal is booming, mining is booming, the Surat Basin is booming, and there is a shortage of accomadation there.Freckle wrote:moxi10 wrote:The explanation by the company that the mine has been loseing money for several months seems a bit thin under the circumstances.Freckle wrote "Not really. Management at BHP aren't rocket scientists by any stretch of the imagination. Having worked as subby within their systems they're their own worst enemy."
When you worked as a sub contract cleaner for BHP 10-20-30? years ago you gained some wonderful insights one day while cleaning the boardroom floor. You discovered that management were all incompetent and inept at performing their jobs. You realized with crystal clarity that investing in anything they were involved in would certainly result in you loosing your shirt. So you've no doubt followed your own advice and stood by on the sidelines ever since, warning others about the folly of investing in anything BHP touched. Over the years, through a process of evolution, you've expanded and broadened your lack of investment strategy to include all other mining companies, and then Australia's entire residential housing market. The success of your strategy is visible in the pathetic position in which BHP finds itself today.
Freckle wrote "BHP is under mounting pressure to get it's profit margin up and return better profits to shareholders/investors. There's a big rethink going on within BHP as shareholders/investors pressure for shorter time frames for ROI instead of their customary long view when planning future acquisitions and expansions"
With over $200 billion dollars worth of projects currently underway in the Surat and Bowen Basins, the closure of one mine at a time when strikes and floods have had a major impact on production results, should be looked at in the context of the broader picture. As I have pointed out in my previous posts, I believe a major factor in BHP's decision to close this mine has been a strategic decision to put pressure on the striking workforce. It's also possible that they have considered that there are not enough skilled workers to meet the demands at their other (more profitable?) expanding mines in the surrounding region. A combination of forced transfers and sending a message to the CFMEU and striking workers may have seemed like an attractive option. I don't believe this decision reflects on the financial viability of their other mines, or those of other companies in the region, to continue operating
Freckle wrote "My gut feeling is that mining town investors are in for a bumpy ride over the next few years with more than a few loosing their shirts on the process".
The Freckle
Certainly the ride will be bumpy, and some of us probably will lose our shirts, especially when the ride ends. But the most certain to lose, and the most losers, will be those who stood by, too frightened to take the risk of getting off the sideline.
The closure of Norwich park does not herald the end of the road. It's just a bump.
Cheers
TonyHi Tiger14
It was not my intention to imply that I thought safety was an issue in the closure of the mine, merely that it is an issue in the strikes, which i understand are affecting the operation of 7 BMA mines in the region. The miners feel strongly about the safety issues involved in the negotiations, which increases their solidarity in opposition to BMA. It would be illegal to sack the striking miners, and of course counter productive, as the company needs them. There's nothing like job losses and the perceived threat of further losses to make employees toe the line. The cumulative impact of the strikes on profits at seven mines might give BHP cause to close Norwich Park. The explanation by the company that the mine has been loseing money for several months seems a bit thin under the circumstances.
I just read the below article in the Mackay newspaper. In it the BHP spokesman mentions that the Norwich Park mine has "vast resources". At a time when several companies are planning to build their own export terminals, railroads and even towns in the Galilee Basin in order to access inferior grade coal, this closure seems to defy explanation. Adani have already purchased terminal facilities at Abbot Point and land in the Galilee Basin, plan a rail line of their own, expansions to export terminals, have sought approval from the Fed government to bring in overseas workers, and plan to put the coal on their own ships to transport to India.. There are even apparently well advanced plans to build a rail to link the coalfields in the Bowen and Galilee Basins with the iron ore regions in W.A. Why can't BMA make Norwich Park viable?
In the comments from locals below the article (I love reading these) there is mention of Norwich Park being closed "quite a few times" in the past by BMA as a "sacrificial lamb".
My personal opinion is that the timing of this closure with the current strikes underway and the influence BMA is exerting on Moranbah is more than a coincidence. It is already apparent from reading the comments by locals that BMA has succeeded in creating a deep division in local opinion regarding the strikes. These strikes by the miners have been supported by an overwhelming majority, nearly 100% of miners voting to hold them. Some of the issues involve safety, and the insistence of BMA that the union should no longer have the right to carry out independent inspections of safety standards at BMA sites. BMA insists that their own employees should perform these inspections. Right, so the miners should accept that BMA can pay somebody to tell them they're safe in an extremely high risk environment. BMA has been inflexible on these issues. The strikes are costing them millions. So Norwich Park, with it's "vast resources", gets closed. Hardball.
The combined events have considerable implications and ramifications for investors in the area. It seems we are seeing, and some of us personally experienceing, the downside potential of investing in mining towns, particularly those where any one mining company has the ability to wield such overwhelming influence on the community.Tony
http://www.dailymercury.com.au/story/2012/04/12/dysarts-hammer-blow/
simple wrote:Fascinating replies!On our last company BBQ, I have spoken with workers (over 50ppl). Two where selling, few where regretting that they purchased in the last 3-5 years. None are buying.
So it would appear that only some specialty investors are out there doing some purchasing.
Interesting times.
Seems to me your survey has too narrow a base to derive any conclusions from.
The statement by BHP that the mine had been losing money "for several months" is an inadequate justification for closing a mine in a region that has just gone through a wet season which included severe floods, When you also consider the fact that the strikes at BMA mines would have recently impacted negatively on bottom lines, a much longer term analysis than "several months" would be required before there could be any true justification for this closure.
Perhaps the true reason is a combination of stopping (temporarily?) short-term losses and playing a card to scare the striking miners?Up to 1400 jobs (presumable including contractors) affected, according to this article. And yes, there are many more mines in the area, but bad news none the less. A BHP spokesman is quoted as having said the mine "has been loseing money for several months." Seems to have been a pretty quick decision, given that the strikes and recent weather would have contributed to those losses.
http://www.cqnews.com.au/story/2012/04/11/bhp-closes-norwich-park-mine/
That's good news for you and other investors in Moranbah, CMS. BMA is not the only player in town, too much going on there and too little accomadation to go around. Rents are likely to drop as investors reconsider their positions, but at the previous levels, there should be a bit of lee way available for a reduction.
With your reasonable attitude and willingness to be flexible and negotiate a fair price, your place shouldn't be vacant for much longer.Cheers
TonyJamie M wrote:simple wrote:Who is buying in 2012 ?Me. We just exchanged on a new PPOR in Canberra. The market here is presenting some good opportunities and the right property came up at the right price.
I have plenty of investor clients who are still purchasing and quite a few clients upgrading.
Cheers
Jamie
Me too simple, as I said I would on your bear thread. Settled on a 4 bed 3 bath house in Mackay about a month ago, signed a contract for an OTP unit in Emerald today, and plan to purchase again within 6 months. The boat is sailing.
KeyStrategies wrote:moxi10 wrote:Hi Mrs P ……………
I personally would expect the rental demand to return to it's recent high levels in the near future, as there is no short term solution to the lack of supply in Moranbah, and I suspect that the combined efforts of the mines to hold back demand will have a limited impact in the near term.
However, it is obvious that investors who have recently purchased at elevated price levels, expecting high yields to cover their loan repayments, will be experienceing stress currently as they wait for demand to resume. There are some obvious lessons for all of us here.Hi Mrs P ,Moxi10 and everyone,
It is a question of supply and demand – It appears that Demand is currently being withheld by more than one of the major players in town and there is the Increased levels of supply coming in the pipeline. The other question is how sustainable are these rents long term? With new projects coming up and workers needing to be housed is this just a short term blip on the radar that you will have to ride thru? It will bw interesting to see where the market is in 3 to 6 months.
Hi Key Stategies
Your summaries of the developments and new accomadation to be supplied for Moranbah are interesting. It will be interesting to see if there will be enough new supply to meet demand. It is apparent that the mines, BMA in particular, have decided that rents in Moranbah have risen to unacceptable levels, and are holding back demand to reduce pressure. And the strikes are also probably reducing demand as well. However, unless I'm mistaken, the strikes should not be affecting the construction crews,
who are usually sub-contractors.
Although demand for accomadation should pick up again soon, the recent inflated rental rates may not be attainable again. I would be quite happy if I had purchased a property there a year ago. After prices and rents went up, I made the decision that it was too late for me to get in there. Trying to get in on the tail-end of a comet is obviously not a safe option. I'm happy to watch and learn now. Lessons there may be applicable elsewhere.Tony
mrs p wrote:Interesting for sure but isn't it a mere question of supply and demand? If the companies want the work done- their employees have to sleep somewhere- Unless of course they can instantly create hundreds of new dwellings? Does it mean the companies know something we don't or is it just a case of construction phases of projects are nearing completion and the total number of workforce to maintain the projects will be significantly less?
Hi Mrs P
You make a very good point that the mines will still require accomadation for their workers, Obviously the Mac camps accomadate a lot of them, but many employees would not be satisfied by this style of accomadation. It seems as though (understandably) the mines are attempting to reduce some of the short-term pressure that has forced rental and purchase prices skyrocketing in
Moranbah. It's obvious that supply is not keeping up with demand, so it seems as though BMA is doing it's best to hold back demand in the short term to reduce pressure.
In answer to your question "is it just a case of construction phases of projects nearing completion?" I can tell you from personal experience and knowledge that the time and workforce required to complete projects on the scale of those currently under construction near Moranbah are no where near their peaks. And as all of us who follow these forum threads closely, or perform independent research, are well aware, there are many more projects still on the drawing boards that should ensure long term demand for accomadation in the area
I personally would expect the rental demand to return to it's recent high levels in the near future, as there is no short term solution to the lack of supply in Mornabah, and I suspect that the combined efforts of the mines to hold back demand will have a limited impact in the near term.
However, it is obvious that investors who have recently purchased at elevated price levels, expecting high yields to cover their loan repayments, will be experienceing stress currently as they wait for demand to resume.
There are some obvious lessons for all of us here.
