Broome - Browse oil & gas go ahead

Broome is on the cusp of an interesting transformation from a tourist town that supports the Pearling industry (or vice versa) to one that will now be supporting the oil & gas venture on its doorstep.

There has been a noticeable reduction in the number of houses on the market as a result of recent investor activity.

This is all likely to shape into a very interesting property story over the next year or so. It is expected that there will also be an influx of people to the town as a result of the Gorgon project in Karratha to the south as that heats up the property market down there.

Does anybody have any thoughts about this place as an IP strategy.
I have just read that the Broome North development will go ahead and provide blocks of "affordable" value into the future as the town predictably grows by another 13000 people of over the next 10 years.

How will this affect price growth there??

Pango.
 
transformation from a tourist town that supports the Pearling industry (or vice versa) to one that will now be supporting the oil & gas venture on its doorstep.
Having lived & worked in the Kimberley region for about 13 years in tourism & real estate, I don't believe Broome will change much from it's feel as a holiday / tourist town. Alot of the people working for these developments will also be fly-in fly-out staff from all over the place. For instance, I have two Uncles who live in NZ, but one works in Karratha & one in Port Hedland. One, incidently, takes his accommodation allowance as cash & this inturn pays for the extra costs of his flights and he puts the rest into his property investments!

There's no doubt the population will grow with the new industrial ventures in the pipeline, but the population's always growing with people moving there for the change of lifestyle aswell. There's alot of government departments & funding in Broome, alot related to the high population of Aboriginal people (compared to other towns - please don't add me to a racist thread!).

There has been a noticeable reduction in the number of houses on the market as a result of recent investor activity.
It's only one small point, but April to October is the main season for tourism. Broome is accessable & popular all year round, but they are the most popular months, especially with regards to the weather, and the population will more than double. With the EXPECTED & DEFINITE growth during these months, more rent can be demanded. It can be a tight market there.

At the moment, ALOT of singles / backpackers are moving to town for seasonal work (mainly tourism). Right now I have a young cousin desperate for cheap accommodation there. The best she can get is $230pw bedsit within a caravan park or an onsite caravan.

A few years ago a motel bought a block of flats next door just to accommodate their staff! The work was there, and people want to work, but there was just nowhere to live!

Then there are the govt. departments. If I was to own a property there with a long term view, I would seek to secure a government lease on a typical 4 x 2 with a pool or what is referred to as a "Broome style" home, and not in "old" Broome. Alot of the departments have their own set of rules for their staff living in the house (GEHA), aswell as the usual WA Tenancies Act so to me that's even more security in knowing your house will be looked after. Alot of govt staff are employed as a package deal including rental assistance, air conditioning, fuel & other allowances plus free flights back 'home' each year for themselves & family. High rents are definitely affected by this 'guarantee' of a certain amount of rent you can get.

Broome North development will go ahead and provide blocks of "affordable" value
A very important point to make, and if you live up here you'd read this with a smile - everything up here is done in "Kimberley" or "Broome-time". As in "NT time" = not today / not tomorrow or "WA-time" = wait-awhile. As for value, it aint cheap livin' anywhere north of Perth, especially up here!
 
I'm still waiting for this deep water port for Derby... hopefully won't be long! makes sense to base industry and workers in derby rather than upset the broome locals
 
Geat post Kath all very valid points. One needs to remember a lot of these mine workers have young school age children and they are not going to uproot their education in the hope that Broome schools are first class.
A school is only as good as its principal.
I was a resident of a Kimberley town that the principal was the cause of a fair bit of evacuation, me included.
Living in the tropics is not everyones cup of tea l can asure you.
I loved it though.
It costs a small fortune to fly in and out of our north.
Yes there will be a a good lift in prices always has been a constant eb and flow up that way.
Kath is right though you would want to make sure you got a Govt or company lease for your ip,
All insurances , rates, repairs etc virtually tripple up that way.
And a good cyclone every 10 years or so really sorts everything out.
Ausprop you are right about Derby but please dont hold your breath waiting:eek:
cheers yadreamin
 
And a good cyclone every 10 years or so really sorts everything out.

Really? This is news to me - when did the last cyclone hit Broome?

By the way, hoping on Browse is a very long term proposition. Quite a few approvals and investment decisions before that gets the go ahead. It's only when the D9s move in that the real housing demand starts...
 
I'm still waiting for this deep water port for Derby... hopefully won't be long! makes sense to base industry and workers in derby rather than upset the broome locals
So upset the Derby locals instead?! Imagine the infrastructure required. Imagine the costs! :eek: Have you been up there? It's about 2 hours north of Broome. The next port of call is Wyndham. Not the Wyndham Harbour Project as discussed in another thread. Goodness, they're on completely different planets! DO NOT GET THOSE TWO WYNDHAM's MIXED UP!!:eek:

A school is only as good as its principal.
Curriculum & teachers of course - another reason we'll be leaving for QLD at the end of the year. And exactly the reasons ALOT of children leave anywhere from year 8 to go to boarding school. There's a school within cooee of the majority of residential areas in these small towns. Fantastic financial packages for teachers willing to teach up here.

And a good cyclone every 10 years or so really sorts everything out.

Really? This is news to me - when did the last cyclone hit Broome?
We're in cyclone season now. Broome had a Category 5 at Xmas time come through. Most people think Cyclone Tracey. When you live here, unless it's a Cat 3 or more, it's just really windy. We usually expect a phone call from our concerned Mother's on those days bless 'em.
 
I have lived in Broome for the last 13 years and being investing here for 10 years so thought I might be able to give a little more insight into what is going on. My husband and I currently have a PPOR and 3 IPS here. We have been really lucky with our investing here and got in before the last boom and saw great CG rises along with rental increases too. There are certainly plently of great opportunities in town now after a recent price correction.

I don't think Broome is high risk at all. Regardless of whether or not oil and gas goes ahead, Broome is a seachange destination and people want to live here. We have more than one industry. Once upon time the town relied heavily on pearling, while pearling is still important to the region it has taken a backseat in recent years to tourism. Now we obviously have oil and gas thrown into the mix.

Believe what you want about oil and gas but in reality you just have to drive around the industrial area to see what is going on. Mermaid Marine are building a new multi million dollar complex and they have yards full of rig casings. Areas of land are being developed specifically for the industry. A big helicopter hanger and terminal building has been built at the airport for Bristow helicopters that service only the rigs. They don't just throw these things up in a small town on the "hope" something might happen.

There is a shortage of housing and even with the Broome North development going ahead, housing is still going to be in demand just keeping up with the normal population growth. I think the Broome North development will have similar results to the succesful Roebuck Estate development. People will snap up the blocks because they are cheap (for Broome). I don't see them affecting prices in town. The last 12 months has seen slightly more available on the rental side of things. We chose not to increase rents on renewal this year as there were a few more vacancies than there had been over previous years but it was more a case of wanting to hold onto our tenants and not wanting to pay letting fees should we sign new tenants. A 2 week letting fee is the norm up here and that hurts when rents are between $700 - $840 a week. After 3 years of decent rental increases we felt we could sit tight for year.

I steer clear of GEHA rentals for the very purpose that you like them Kath. I think it inhibits your rental increases and over the next 12-24 months that is definately not something I want to be doing. GEHA also won't look at anything with a swimming pool. We have never had a problem getting tenants into our properties - and two of these are in "old broome" and both have performed exceptionally over the last 4 years. I think you will find that Old Broome will continue to perform well because Broome is on a small pennisula and the only direction in which the town can grow is north so anything closer to the town centre is going to benefit.

As for cyclones, they really are few and far between. I must have missed the cat 5 at christmas cause I didn't even have to take my shade sail down ;) The last big cyclone we had was Cyclone Rosita back in 2000, and even though that caused some damage around town, it was mainly trees and power lines down, there was very minimal structural damage and the eye actually didn't cross us. (It did flatten the resort it crossed but that is a 130km drive away) Because of how Broome is situated on the Dampier Pennisula it is very unusual to get a direct hit from a cyclone. We are kind of tucked back in and slightly protected and they tend to swing around us. At most we normally just get some rain and little bit of wind. I certainly don't lose any sleep at night worring about my IPS getting flattened.

Investors are coming back into the market and an agent told me a couple of weeks back that a lot of Pilbara residents/workers are investing here.

I think the next fews years in Broome will be very exciting from an investor point of view.
 
Nice to know "Later" there's a member close by, although still some 1000km away! ;)

I steer clear of GEHA rentals for the very purpose that you like them Kath. I think it inhibits your rental increases and over the next 12-24 months that is definately not something I want to be doing.
Our GEHA leases, and friends I know who have them, all had / have 6 monthly rent reviews. Just another suggestion for options.

I think you will find that Old Broome will continue to perform well because Broome is on a small pennisula and the only direction in which the town can grow is north so anything closer to the town centre is going to benefit.
I agree & no doubt it will continue to grow. I realise now I commented on 'old Broome' from the point of ME living there, not for investing.

Broome is very special to me having over 100 years of family history there, but I'd never live there! I'm a freshwater girl ;)

By the way "Later", without me researching at all, do you know if St Hilda's is building a new boarding school down there?

Cheers
 
Kath,

I've read some of your posts before (I think it was about problem tenants) and wondered where exactly you lived up here. We are lucky to live in such an amazing part of the world.

Both my mother in law and 2 sister in laws went to St Hildas and they certainly haven't heard anything about a boarding school being built. There was talk about an anglican secondary school being built at the old chook farm but the government knocked that on the head last year saying that they felt the population didn't substantiate it. It seemed like a crazy decision, the locals where all for it and there definately is a need for another schooling option. Will let you know if I hear anything different.
 
How about the social problems in town, I heard they have been getting worse over the years
I don't actually live in Broome, I live further north, still in the Kimberley region. I'm only presuming you may be asking me about the politically incorrect subject of the Aboriginal social problems in the region?! I'm sure there's a forum somewhere in the WWW about people's opinions. I couldn't give you one for Broome.

I can only answer you from a personal point of view for my town. I suppose everywhere can have social problems, as such. It can be a touchy subject. I'm not considered a politically correct person in general (and to make it worse, I invest in property & the stock market!) and do have opinions from personal experiences, good & bad. Opinions can be very different when you know of somewhere from a distance & through the grape vine as opposed to living & breathing an area.

please don't add me to a racist thread!
:)
 
So upset the Derby locals instead?! Imagine the infrastructure required. Imagine the costs! :eek: Have you been up there? It's about 2 hours north of Broome. The next port of call is Wyndham. Not the Wyndham Harbour Project as discussed in another thread. Goodness, they're on completely different planets! DO NOT GET THOSE TWO WYNDHAM's MIXED UP!!:eek:

upset the Derby locals? umm... yeh, wouldn't want to develop the garden of Eden:confused: Regardless, it is going to happen.

some imagination is required for the north west. They are suppose to be developing karratha but it has taken 4 months now for landcorp to sign off on my standard single residential house, then I get the privilidge of applying for a build licence. how will they cope with the influx of applicatios? laughable
 
upset the Derby locals? umm... yeh, wouldn't want to develop the garden of Eden
I seriously laughed out loud with that one :D You obviously know the place well.

some imagination is required for the north west
how will they cope with the influx of applications? laughable
It needs more than imagination. I moved up here in 1997, left for a couple of years, then came back last year. The only change I can see up here apart from more houses is the Brumby's Bakery.

All the promises, especially the Ord Stage II expansion really are laughable. Sure, some things are happening, but learning about the area when I was in high school in 1990 to now, I hope it doesn't take another 20 years to change / grow.
 
You're right Alex. They wanted new t-shirts & stationery so justified the cost by changing the name. Same with CALM, Water & Rivers etc..............:)
 
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