Gladstone QLD - How is it Going????

Wow that's some info Jen.
The API vacancy rate, would that be all properties? The majority of vacancies would be units there is a crap load sitting empty and more on the way!!
 
I had the opportunity to purchase a 2bdr unit in Gladstone Central not long ago and I did my DD before purchasing. I spoke to a close friend of a client of mine who has owned blocks of units there and has developed numerous blocks there. I also spoke to all the Principals/Directors of the 5-6 most prominent agencies in Gladstone Central telling them I had a unit to SELL. These were my findings:

- They all told me not to sell as we are at the bottom of the market
- One of them told me they had units that would have been worth $310k in 2011; they now have them on the market at $250k and are getting no enquiry whatsoever
- Rents have dropped significantly due to 900 units being built/still to be built. These will take many more months to absorb, so expect stabilisation or slight decline in rents in the short term
- A lot of 'investors' paid exorbitant money for OTP units and are now getting significantly lower rents and they are worth less than what they paid for them

It seems at the moment the only sellers are the ones needing to sell. I think over the next 3-9 months this will only get worse and there will be some good bargains.

It looks as though there will be good growth in the medium to long term though.
 
Great info JenJen, thanks!

I would clarify one thing though...

JenJen said:
mining towns
Click to expand...

I don't think it's accurate when people classify Gladstone as a mining town. However I will agree that it's helpful to learn what you can about mining towns and use some of that knowledge for any Gladstone based investing.

When I think of mining towns I think of single industry, small places. Gladstone is our nations industrial muscle city - many industries and technically a 'city' in terms of population.
 
Yes, that news really was a downer today.

The only major projects still on the radar to come are the $1.8 billion gas plant and QER shale oil. Looking forward to some good news on them in the next few months, hopefully with a change of government, encouraging further projects.
 
Which suburbs in Gladstone would be a good buy? (as in what areas low crime, close to amenities etc)

To buy H+L package
 
davu said:
Which suburbs in Gladstone would be a good buy? (as in what areas low crime, close to amenities etc)

To buy H+L package
Click to expand...

Barney Point. :p

90% of the new estates in the suburbs of New Auckland, Kirkwood and Glen Eden don't have planned amenities. Only one of the new estates has constructed a new shopping centre and most people have to commute towards the city centre or to the industrial plants/port/construction zones for work.

Of course, do your own due diligence and don't simply take my word. Once you can name all the Gladstone suburbs off by heart, you probably know more about the place than 90% of the investors who have bought in Gladstone.
 
davu said:
Which suburbs in Gladstone would be a good buy? (as in what areas low crime, close to amenities etc)

To buy H+L package
Click to expand...

Davu - have a search for my previous posts on the area. I would not recommend a H&L package, unless you like paying 25k commission on your IP. I'd go for an established or 2 year old H&L thing.
 
longterm said:
"Fear when others are greedy and be Greedy when othersfFear". If investment is based on strong fundamentals then Gladstone is the place to buy. I bought a property in Jan 2013 and just in aprocess of buying one more. There are some panick sellers right now and there are some great oppurtunities.
Click to expand...
Longterm,
I just spent the weekend in Gladstone trying to work out whether its time to buy. I'm finding i can do cash-flow positive in CBD'ish areas with low end unit blocks but im just trying to form a view on how much rents might drop back. Given your Gladstone experience just wondered what your view is regarding rentals in low end CBD area.
 
BozPhil said:
Longterm,
I just spent the weekend in Gladstone trying to work out whether its time to buy. I'm finding i can do cash-flow positive in CBD'ish areas with low end unit blocks but im just trying to form a view on how much rents might drop back. Given your Gladstone experience just wondered what your view is regarding rentals in low end CBD area.
Click to expand...

Never buy units in Gladstone. You can buy a 3 bedroom house for 300-350k and 4 bedroom house for 375 to 450K. Prices have gone back to 2010 level which I think is great for investors and the prise is starting to stabilise. Again please do your own reasearch and make sure you can manage if things go worse.
 
Fairfax Media report: http://www.tradingroom.com.au/apps/...ished/2013/8/238/catf_130826_135400_0097.html

Boom to bust for mum and dad investors

BRISBANE, Aug 26 AAP

August 26 2013, 1:54PM

Two years ago, the central Queensland town of Gladstone saw a property boom unlike anything in a generation.

Multi-million dollar liquefied natural gas processing plants were being built and turning nearby Curtis Island into Queensland's economic engine.

Some of the thousands of workers needed for the projects camped out in utes, parks and garages while they waited for properties to be built to meet demand.

Mum and dad investors like Nick Small, lured by brokers promising rivers of gold, wanted in.

Single father-of-three Nick was told if he bought a three-bedroom unit for about $550,000, he'd be getting $1000 a week rent and could expect to make about $6000 a year profit.

That was the case for about a year from mid-2011.

But a local real estate agency estimates about 3500 homes were being built in the region between 2011 and 2013, sending the town on a runaway path to over-supply.

By the time Nick got his keys last month, there was a glut of properties and workers had moved into newly-built camps or were choosing to fly in and fly out.

Nick's property is empty.

The best he can hope for is $500 a week rent.

If he sold, he'd lose at least $50,000 on his original investment just 18 months ago.

"I was a dumb country man, that's why I went to a broker for advice," he told AAP.

"I'm not quite sure they are predatory, not quite sure if they are cut throat, but they are there to make money.

"Inevitably they are my choices, it is my mistake."

The investment was supposed to be Nick's ticket to semi-retirement, but his plans have been put on hold until he can sell.

Ray White Gladstone estimates that in the first four months of 2013 there were 1740 properties in the Gladstone region on the market, which translated to 248 sales.

And, 530 homes are currently vacant.

The Real Estate Institute Queensland says 4.6 per cent of rental properties were vacant in June, the second highest level in the state.

One year ago, it was just two per cent.

Landlords are now offering fully-furnished homes, or rent free periods, to secure tenants. Some even chuck in free lawn mowing or a plasma television.

Ray White Gladstone principal Andrew Allen says a false market was created, and prices had consolidated in the last six months.

"We are the ones having to pick up the pieces when mum and dad investors come in asking why the rent isn't what they hoped for," he told AAP.

The Property Club has tracked boom-to-bust situations, and investors in Moranbah in central Queensland and Port Headland in Western Australia are experiencing similar hardships.

"Unfortunately, many mum and dad investors now face the very real possibility of negative equity and servicing huge loans and declining rental income," president Kevin Young says.

"Despite the new economic reality, property spruikers are still promoting new homes."

Gladstone Mayor Gail Sellers says locals are aware of the town's fickle boom and bust nature, something that was recently dramatised in community musical Boomtown.

Out-of-towners chasing a quick buck were most at risk, she says.

"I have to say I don't have a lot of sympathy," she told AAP.

"The people in Gladstone ... knew it would come to an end."
Click to expand...
 
We have been one of the highest vancancy rates for most of this year. And still more houses and units are being built. The next 6 - 12 months is going to be very painful. Unless more construction is announced the oversupply of houses and mass lay-offs will hurt a lot of investors.
 
edge81 said:
We have been one of the highest vancancy rates for most of this year. And still more houses and units are being built. The next 6 - 12 months is going to be very painful. Unless more construction is announced the oversupply of houses and mass lay-offs will hurt a lot of investors.
Click to expand...

Councils are morons, A mining boom will increase house prices and rents. They think they are being clever by building at such a rate to soak up all demand and keep their town affordable. But what happens when there arnt so many construction jobs in town? The population will fall back - not as far as before all the construction started but by a significant percentage. Then they are left with a bucketload of supply and no demand - crash.

I think the only safe investment in a town with mining related industry or work is probably what most people would call the riskiest investment
 
Here is an article I wrote for API magazine recently titled 'Mining towns boom or doom'

http://www.apimagazine.com.au/api-online/newsletter/13/may-newsletter-1/mining-towns-boom-or-doom

This should give people an understanding of the long term outcome for mining towns. '

And this one 'sell while you still can'

http://www.apimagazine.com.au/api-online/newsletter/13/august-newsletter-1/sell-while-you-still-can

I should also state I purchased 6 lots in Gladstone and flipped them in 2010. But flipping is not investing its an income and I could afford the risk. I wouldn't suggest this while you're building your portfolio.
 
Last edited:
You must log in or register to reply here.

Similar threads

jsoe
Samford Valley QLD
Replies
0
Views
1K
jsoe
jsoe
Erica
Southern Adelaide investors- market update please
2
Replies
28
Views
5K
Nemo30
N
Jenko
Cairns market maybe slightly improving is some areas?
2 3 4
Replies
75
Views
13K
JenJen
JenJen
S
Belfast , N Ireland
Replies
0
Views
823
Starofdavid
S
P
Selling Townsville buying Adelaide
Replies
16
Views
3K
Logica
L
Back
Top