Emerald property market - hype or might?

There was a time where Emerald was one of the fastest growing areas in Queensland. With demand completely outweighing supply of housing we saw rents in excess of $700 and zero vacancy rates. It was an investors dream that offered positive cash flow and strong capital growth with a diverse industry of mining, retail, construction and agriculture. 12 months ago it was said there were 49 coal mines in the area which will provide jobs for at least the next 50 years.

What has happened in the last 12 months? There have been numerous developments approved in the area, a lot of infrastructure has been established in an attempt to stimulate further growth. What effect will falling commodity prices and the so called "end of the mining investment boom?" What about the slow-down of the Chinese economy? Is there still a demand for our resources?

Furthermore, what will happen to the property market in Emerald in the coming years? Is this just the bottom half of a constantly changing property cycle or will we see further diminishment in consumer confidence leading to nightmares for property investors in Emerald?

I would like to throw this topic into the ether and generate a good conversation about the future of Emerald?
 
There has been substantial shifts in the coal industry over the past 12 months. It is true that the price of thermal and coking coal has softened of late and together with the high cost of production it has been a high cost environment.

This came to a head last year with companies right throughout the industry cutting costs and improving productivity. This simply had to happen and now we are starting to see vitality and competitiveness come back into the industry.

There is no doubt, Emerald is tied to the commodity cycle but in saying that it does have diversity in other industries. Without wanting to start a political debate the current federal government has failed miserably to sustain a stable environment for business in this country over their term in office. This is even more so pronounced in the mining industry. This has become evident with Rudd scrambling to drop the carbon price. However, the world has become to know Australia as over regulated with the government implementing policy at the drop of the hat. Just have a chat with any share holder of McMillan Shakespeare....

IMHO we need some stability. I would expect these mining companies are just waiting for an election result after which they can proceed.

If you understand the phases of the mining industry, of which a lot of two bob reporters appear not to, you will understand that infrastructure investment may be tapering off however, we are now about to enter increased production which has been seen in the resent results on ore volumes.

However, what remains incredibly attractive about Emerald is that it is on the door step of an entirely new coal and gas mining province, the Galilee Basin. The investment size is absolutely huge with Adani and GVK in particular already spending huge amounts of cash up to this point.

I must disclose that I do hold property in Emerald and it has been a bumpy ride over the past 12 months. However, I have managed to retain my tenants by being sensible with the leases. I was fortunate enough to purchase before the previous lift in property prices so have not been affected like those who purchased at the top.

Like most markets, developers jumped in during the last boom and started a high volume of construction but then got caught out as the market rapidly softened. Construction looks to have finished now and rentals appear to be dropping. At one stage there was almost 300 vacant properties however we've come back down to 245. However, it's still soft.

I have a lot of faith in Emerald however, you have to be prepared for the industry ups and downs....it's that simple. And, like every market during the cycle...right now is an opportune time to get in as there are most likely some real opportunities out there.

As always DD is the key and again a true understanding of the market cycle.

Jack
 
The way I see it, because most housing markets have been slow developers and builders have flooded to any places that have shown any signs of life, like Gladstone, Emerald, Mackay, Chinchilla, etc. These markets have been flooded with properties hence the oversupply. I think some quiet time in these areas will do them the world of good.
 
The way I see it, because most housing markets have been slow developers and builders have flooded to any places that have shown any signs of life, like Gladstone, Emerald, Mackay, Chinchilla, etc. These markets have been flooded with properties hence the oversupply. I think some quiet time in these areas will do them the world of good.

Yes I'd agree with that 100%. It really took off in those areas influenced by the commodities. It had to happen and it'll be good for the market. Some vendors really suffered out in the more acute markets such as Moranbah, Dysart, Middlemount, and Blackwater however, those areas you mentioned Jenko are a little more diversified. I'd imagine there's some developers trying to dig themselves out of pretty big holes at the moment and an opportunity to swoop in and grab a bargain.....
 
Wow. Prices have really come off on Northside of Emerald, I went to Emerald last year to have a look around, Something like this would have been def 400 18 months ago.
 
http://www.realestate.com.au/property-house-qld-emerald-114437659

Went to this auction this morning, sold for $300,000 on the first bid, and the buyer seemed quite surprised. I remember similar places going for close to 400k back in early 2012. I think the rot is far from over with all these new houses coming online in the estates on the southern side of town.

Someone got themselves a bargain! Cyclical investing at it's best and bound to happen in this environment. Well done whoever it was :cool:
 
Finally had a chance to look at the 4 flood mitigation options Central Highlands Regional Council is considering (all involving Levee Banks). They look awfully long and expensive, but would drastically cut the number of flooded houses , particularly around Roberts St/Riverview St area and the Western side of town. It would be nice to see my insurance bill go down, but hopefully not at the expense of insanely high rates to pay for it all. See link below

http://www.centralhighlands.qld.gov.au/web/flood-mitigation/emerald-flood-mitigation-options
 
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