All Topics / Help Needed! / Olympic dam expansion no more. Whats going to happen to property prices?

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  • Profile photo of zahnzahn
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    @zahn
    Join Date: 2008
    Post Count: 3

    Hey guys,

    Just curious to know what is going to happen in SA with the olympic dam expansion not goin ahead anymore. Whats it going to do to regional towns like roxby downs and whyalla? Will they still thrive? Or even survive?

    I'm just about to settle on a property in Whyalla, now im not to sure about the whole situation. As far as i know, everything is still business as usuall apart from the expansion not going ahead but will this have a snowball effect?

    Profile photo of Kohlhagen GroupKohlhagen Group
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    @kohlhagen-group
    Join Date: 2011
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    http://www.businessspectator.com.au/bs.nsf/Article/BHP-wont-proceed-with-Olympic-Dam-expansion-pd20120822-XE94U?opendocument&src=idp

    I think it is a real blow for SA. The expansion was an enormous amount of activity for SA. Personally I am not changing my investment plans, I just think we'll miss out on a Perth / WA like boom, at least for the time being.

    If someone was speculating on land in SA to go through the roof due to Olympic dam they might have to wait a while longer yet.

    Profile photo of M.InvestigatorM.Investigator
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    @m.investigator
    Join Date: 2012
    Post Count: 134

    I also think that prices will remain stable or dip lower. There probably won't be a massive boom in prices so if you were speculating on a boom in prices and a spike in capital gains, you may not get it.I think

    It's fine that you bought in whyalla, although I think you need to make sure that you're buying at a good price, relatve to the rents that you will receive and the returns that you'll get. Make sure you're not overpaying.

    Profile photo of DWolfeDWolfe
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    @dwolfe
    Join Date: 2009
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    Profile photo of zahnzahn
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    @zahn
    Join Date: 2008
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    Thanks for the link DWolfe. It clearly explains that SA isn't heavily reliant on the Olympic dam expansion. With all the other activity happening in the area, I'm happy to go through with purchase. The price I'm paying for this property will still make it a CF+ so all good :)

    Profile photo of DWolfeDWolfe
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    @dwolfe
    Join Date: 2009
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    This is what Due Diligence is all about.

    If you do your own research and you make sure the property suits your investing needs, then that's the end of it.

    Good luck with it all Zahn :)

    Cheers

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of astroboy71astroboy71
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    @astroboy71
    Join Date: 2011
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    The cynic in me says that Mining companies are really just holding out for a change in federal government. One that will repeal the mining tax. And perhaps they are single handedly trying to lower the Aussie dollars value to improve profits…?

    I have seen the head of BHP say on tv that they predict Chinas demand for minerals will increase in 2013. 

    So may just be a longer wait. 

    All my opinion though!

    astroboy71
    Email Me

    Profile photo of PaulliePaullie
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    @paullie
    Join Date: 2009
    Post Count: 217

    I work in Engineering in WA.

    BHP have an external hiring freeze. A few months ago there was all talk of boom time, I can tell you I don't see it here.

    If anything companies are now bringing in cheap 457s to increase profit margins, its diabolical really.

    The company I'm sub contracted to, and its a big multinational vendor, has NO big projects in the foreseeable future, they also lost the Olympic Dam work this week.

    What boom?

    Profile photo of pypy
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    @py
    Join Date: 2012
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    I will continue to invest in Whyalla and the copper, uranium aren't going anywhere. The project will happen at some point of time and in long term it will be a gain. Mining companies will play all the tricks and BHP is a master of it. Who knows, in couple of years time there may be another company who will be interested in exploring Olympic dam. or  BHP can do a U-turn. I did not invest in Whyalla for Olympic Project but for the resources available there. Even without olympic dam, SA will do very well. As with any investment, understand the fundamentals and for me it is great in Whyalla.

    Profile photo of PISTOREPISTORE
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    @pistore
    Join Date: 2012
    Post Count: 75

    BHP are a Blue Chip company that need to look after their share holders. Their decision is one more for the current conditions. I believe they will still proceed with the project when the time and conditions are right again. Be that a new government or world commodity prices.

    Whyalla is still a good place to get an early foot hold in.

    Profile photo of moxi10moxi10
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    @moxi10
    Join Date: 2010
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    The Federal Government has officially lifted the moratorium on mining exploration in the Woomera Protected Area, allowing exploration to take place in a little explored area comprising 13% of the state. As Terry Ryder points out in the second link below, this important announcement has received very little publicity, but holds great significance for investors in the region. Those who secure properties early (now) in strategic locations will be set to reap rewards. I haven't yet stretched my deposit funds far enough to purchase there, but it is on my list for things to do!

    http://www.miningweekly.com/article/federal-goverment-lifts-moratorium-on-exploration-in-wpa-2012-10-09

    http://www.propertyobserver.com.au/south-australia/south-australia-s-property-investment-opportunities-far-from-finished-terry-ryder/2012101057080

    Profile photo of FreckleFreckle
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    @freckle
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    Mines are already there moxi

    A bit of SA state govt feel good PR. Wouldn't get too carried away with it. You'll be bouncing great grand kids on you knee by the time mining booms again.

    Profile photo of moxi10moxi10
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    @moxi10
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    Hey Freckle, admittedly exploration and approval for additional mines will be an extended process, but the immediate potential for more discoveries of iron ore, gold, uranium and associated minerals is high with the greater access which will be available to mining companies.

    "You'll be bouncing great grandkids on your knee by the time mining booms again".  Your pessimistic outlook makes Martin Ferguson look like an optimist in comparison.

    Profile photo of FreckleFreckle
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    @freckle
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    Moxi it's not pessimism it's called realism. I'm in logistics directly related to resources. I make business decisions based on reality not hope.

    Woomera is 18% of SA in land area. It already has several miners active in that area. The geology is reasonably well understood as well as its potential. Only about 80% of Woomera will be available, the remaining 20%+ will stay exclusive for testing purposes. 

    • We have more supply of the major ores (iron, aluminum, lead, copper etc) than the world can absorb presently. It may take another 2 decades to grow into the current supply capacity.
    • Uranium has a big question mark over it as China reevaluates its own nuclear energy program, Germany and Japan decommissions out of nuclear and alternative nuclear reactor fuels become viable.
    • Gold is usually mined in conjunction with other minerals like copper. As it increases in value it will make currently uneconomic deposits viable however it's a very small player in the resource space.
    • Compounds required for tech and high tech applications will probably see growth (graphite, silver, rare earths) over the coming years but still only represent a fraction of the resource industry.
    • Oil and gas will take the lead in resources – shale gas/oil may have some legs in the future but it's still early days in Australia
    • thermal energy looked promising early on but is apparently dying a slow death as the economics of it play out.

    If your going to take a punt on RE on a resource demand basis then you have to look at the major resources, coal and iron ore. It's only the big resources that push local areas hard and drive demand in local towns. Olympic Dam will probably muddle along for decades unless they can find;

    1. a significant market for uranium, and
    2.  a way to separate copper and uranium economically.

    SA is probably the least attractive state to invest in my opinion and Woomera holds no more opportunity than a thousand other places around Australia. Qld got its lift from coal and gas. WA got its lift from iron ore and gas. SA by comparison has no major resource but instead a fragmented resource profile of many small mine operations. Now that OD has been put on the back burner there is no real driver that will lift SA like the other states. Until there's a business case for investing in SA I'd personally look elsewhere.

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
    Post Count: 2,539

    Educational as always, thanks for sharing Uncle Freckle!

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

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