Investing in Dysart,is it too risky?

I would wait and see if the carbon tax goes through before investing in any mining area atm

how is the carbon tax going to impact coal mining exports?

There appears little doubt this carbon tax is causing the industry some headaches. It has surely caused uncertainty in the market and increased sovereign risk in the short term. However, I also think there is some scare mongering from both sides.

It is my understanding, and I'm only to happy to be corrected, that the carbon tax will only add approximately $1.20c to the cost of 1 tonne of coal for export.

There may be some confusion between the tax on export coal apposed to coal fired energy facilities such as Hazelbrook down in Victoria which burns high polluting brown coal.

I believe the underlying fundamentals are extremely strong. There is a whole lot of politics going on at the moment and some spin on truths. Don't listen so much to what these massive mining companies are saying at the moment but look at what they are quietly doing.

Jack

Ummm…No I don’t see how you create 32 million dollars of equity. Could you explain further perhaps?

Actually the historic trend is 10 years not 7. It has doubled in 7 years once in the past which is why people say 7 to 10 years. It has not and is never expected to double every 7 years. Well that’s what educated property investors knwow anyway because as you can see the difference is substantial.

History has shown that property goes up in value.  It kind of has to anyway.  Everything goes up in price.  Groceries, petrol, houses…  Wages increase each year as well.  The trouble is that wages seem to be increasing at a slower rate than the rate that houses are increasing in price.  The price of property tends to go up at a faster pace than you can save.  Thus it tends to be best to acquire a property as soon as you are able to.  The reason property goes up at a faster pace is probably related to demand.  The population is increasing – through reproduction and immigration.  So there are more and more of us all trying to share the same land.  More and more of us wanting to live within a reasonable commute of the cities where the jobs are.  As they say – land is king – it is something they are not making any more of.  Two things will therefore happen simultaneously:  Property close to the employment hubs; in particular Sydney, Melbourne etc, will become unaffordable for many people.  Such people will be doomed to rent forever if they wish to reside in these areas.  At the same time, the government will be forced to create extra employment hubs (because let's face it – we can continue to cluster more and more people around the existing hubs and expect them to be able to commute to work in under an hour).  In VIC, some examples of this are being focussed around Geelong and Ballarat.

People need food, shelter, and drinking water.  As such, expect that the prices of these will go up as they please and we'll simply have to pay.  The same applies to electricity – but at least if it is cold we have the option of putting on extra clothing instead of turning the heater on.  But when you're thirsty, you need water and that's that.  And unless you're ok with living in a tent or on the street, you'll need a dwelling to live in as well.  Food – yep, we need that too – and most of us have no ability to grow our own food because we do not have the skills and do not own a suitably large patch of dirt in which to grow vegies.  So off to Woolworths we go and pay whatever that pricetag says. 

It would be ridiculous to expect that in a 10 year timeframe, the value of property would not go up.  I've rabbitted on for a little long, but trying to say enough to make it clear that yep property goes up, and thus give you the confidence to commence your investing journey.

All that said, while a property that you buy for whatever the price is now might well be worth millions in the future, it will also be true that the cost of everything else will have gone up.  One million dollars today seems like a lot of money.  In 30 years it won't buy anywhere near as much stuff as it would buy today.  Just ask yourself – what is the price of a Mars Bar today… and what was it 5 years ago and you'll see what I mean.

The beauty of property is though, that you put down SOME of the pricetag, and then the tenants generally pay the remainder of the mortgage off for you.  Nice.

minichic,

how will exports be hit hard when the cost of producing export coal will rise by $3 per tonne potentially. intact that article states that coal will expand.

the day the carbon tax was announced Peabody energy bid $5b for a large coal mining company where it’s main deposits are in the Bowen basin. as an ex local of the Bowen basin and an owner of over 15 properties now in the Bowen basin, I really don’t see how your point is valid. I’m not trying to be rude but some of the largest companies in the world are going against your advice.

what will be affected in the Australian coal industry are coal powered power plants. the amount of coal that is produced in Aus that goes to the power plants is minimal. this will not affect production one bit with current export demand.

if the coal industry and other minerals fail, how fo you suggest the government would survive? they are stupid, but thru are not stupid enough to cut off the hand that is feeding them. that’s exactly how Kevin Rudd was pushed out.

I can assure you, intact I will bet my 15 properties on it, that this carbon tax will not affect export coal mining.