After the boom?

[Jayro]

Hey all,

Just wondering what happens to the towns that are currently experiencing great growth due to the resources boom after the mining stops? Is it a case of buy now, try to time it well and sell before its over or are they still ok places for buy/hold stratergies? Do these towns invest the $$$$ they are now making into other industries and then prosper after the boom still or is it price slumps etc when the mining finishes up?

Jayro

 

[Ausprop]

the riskiest being anything exposed to coal!

just try to make some projections and yes get out if it's looking near its top. with somewhere like karratha, the city has reached a critical mass and has decades of work lined up, so pretty safe bet there. a one industry town could be a different story

 

[BoatBoy]

With towns like Moranbah,Dysart,Blacwater etc. after the last coal boom houses were able to be purchased for thousands of $$$ (Bloss reckons she could have got Blackwater for $8000)

I will be interested to see what happans to Major regionals like Mackay, Rockhampton and Gladstone and I suppose to some extent Townsville as these places are'nt relying on coal only.

Dave

 

[Sunfish]

Don't worry! Be happy!

The resource boom has a long way to go yet. (20 yrs?) And Townsville has reached critical mass. If we fail, there will be chaos everywhere else too. The question won't be "Where else should I have bought RE" but rather "Why have I got RE?"

 

[BoatBoy]

I'll ask again Sunfish, what makes you think Townsville has reached Critical Mass?

You were asked the same questions on this thread but no response was given.

http://www.somersoft.com/forums/showpost.php?p=335998&postcount=5

But I am now willing to call a peak in Townsville. The city is still booming but so too is Perth and it seems it is cooling, property-wise.

I'm been watching the canary closely and it not as well as it was. Maybe I should clarify that and admit that I don't study the RE market closely. I do however keep my eyes and ears open and I don't hear the canary singing anymore and it looks a bit wobbly. Not hanging upside down though, I'll admit.

Remember, dance close to the exits!

Dave

 

[Sunfish]

I overacted there a little, methinks. That was a reaction to a couple of opinions I heard, which looked to fit the facts as I saw them. I have seen nothing to confirm Townsville's peak since however. Just more steady advances.

You may not be using the same definition of critical mass as I do. I define it as reaching a size that growth continues, simply feeding on itself, as the capitals do. To maintain such growth only modest new, external influence is needed and there appears to be plenty of that from government, military, mining and tourism sectors and as a transport hub.

Sorry about that call.

 

[DanielN]

Don't worry! Be happy!

The resource boom has a long way to go yet. (20 yrs?) And Townsville has reached critical mass. If we fail, there will be chaos everywhere else too. The question won't be "Where else should I have bought RE" but rather "Why have I got RE?"

Not entirely true Sunfish personally, it depends whether resources are still in demand by then, yes the resoures will last another 20 years, but will China keep buying them from us? they are one of the reasons we have a bit more independent from the american ecnomy.. people arn't selling because America is.

 

[Sunfish]

Daniel, When I say The resource boom has a long way to go yet. (20 yrs?) this is clearly IMHO only. IMHO China, India, Brazil, Russia etc aren't going away. I assume there will be setbacks but no collapses.

Disagree by all means.

 

[alexlee]

My own view is that with mining towns they are more exposed to the mining sector. So they are going to be more volatile than say a big city with diversified industries. Even if you believe in the resource supercycle theory (and I do), you have to ask whether currently mining towns might have shot above the 'average' growth that can be supported by the supercycle.

Note I have done no research on mining towns, and the above is macro theory only.
Alex

 

[Sunfish]

Note I have done no research on mining towns, and the above is macro theory only.
Alex

Using a similar macro view, if financials and resources are diametrically opposed, (my view) could the financial towns be due for 20 years relative under-performance? Sydney, of course, is the biggest financial town we have.

 

[BoatBoy]

Do we call Townsville, Mackay and Rockhampton mining towns though?

I would have thought mining towns were Collinsville, Dysart , Moranbah , Blackwater etc.

Dave

 

[Sunfish]

Looking back, it was Daniel seemed to think so but you will note this passage in an earlier post where I said: government, military, mining and tourism sectors and as a transport hub. The mining is important though. The number of fly in/fly out miners living here has doubled, but I forget the timescale, and they buy better style units.