Gladstone QLD - How is it Going????
- Thread starter charlieandkath
- Start date
Gladstone Builder
I haven't posted in years but get sick of the rediculous prices tradies charge here in Gladstone.
Give Fred Owers a call (0419663327) he is an older style builder that helped me do a minor reno at a very fair price. The bonus is that he does really good work.
Regards
Dave
I haven't posted in years but get sick of the rediculous prices tradies charge here in Gladstone.
Give Fred Owers a call (0419663327) he is an older style builder that helped me do a minor reno at a very fair price. The bonus is that he does really good work.
Regards
Dave
For those of you that have or are thinking of investing in Gladstone observer story 3500 homes in 18 months and heaps still being built.
Thanks Gladstone,
Fred is our maintenance and repair guy for us in Gladstone. He can't do the job.
I am waiting for another quote.
Cheers
Fred is our maintenance and repair guy for us in Gladstone. He can't do the job.
I am waiting for another quote.
Cheers
Update on Gladstone from an excellent RE agent on the ground. I myself bought here in late 2011. Growth has been flat, however rental returns have been great.
As an example for the 2012 FY: a $535k 4/2/2 would be around $13k positive CF (@85% LVR) AND with a $10k income tax deduction for depreciation (so total say $16k @ 30% tax).
In my opinion, looking like it will be a very good time to buy now or soon... 10-15% off sale! Buy today at 2010 prices with positive cashflow and a great long term outlook! (short term outlook flat?).
Current situation is motivated vendors and not many buyers, I'd go ~5 year old established in one of the original estates (Kin Kora, New Auckland, Telina, etc). Rents are down around $100pw (from 8.5% to 7.5% - still very positive if you lock in at 4.99% - ~$12k positive cashflow post tax on example above).
See below:
As an example for the 2012 FY: a $535k 4/2/2 would be around $13k positive CF (@85% LVR) AND with a $10k income tax deduction for depreciation (so total say $16k @ 30% tax).
In my opinion, looking like it will be a very good time to buy now or soon... 10-15% off sale! Buy today at 2010 prices with positive cashflow and a great long term outlook! (short term outlook flat?).
Current situation is motivated vendors and not many buyers, I'd go ~5 year old established in one of the original estates (Kin Kora, New Auckland, Telina, etc). Rents are down around $100pw (from 8.5% to 7.5% - still very positive if you lock in at 4.99% - ~$12k positive cashflow post tax on example above).
See below:
How do you go getting tenants? 500 houses available for rent is not looking good and there are layoffs happening in at least one company that I know of.
SQM is showing a large spike in vacancies as well.
Couple of bits of significant news out of Gladstone recently.
The first is that of the new Boulder Steel mill. BS has recently been in talks with local businesses for various contracts associated with the project, a good sign that things will happen on this project soon at the Aldoga site. Construction is currently scheduled to begin in 2015, and should create about 2000 permanent jobs in Gladstone.
The other is the QER oil shale plant near Targinie. The ban on oil shale production was lifted back in February, and the demonstration plant currently on site is looking to expand to a full scale operation. The site was previously home to the failed Stuart Oil Shale project which resulted in the demise of the Targinie township that previously existed.
So while people might only see LNG and coal, there's a bit more going than just those two industries. How long it will take for these two projects to get to the construction stage is still unknown.
The first is that of the new Boulder Steel mill. BS has recently been in talks with local businesses for various contracts associated with the project, a good sign that things will happen on this project soon at the Aldoga site. Construction is currently scheduled to begin in 2015, and should create about 2000 permanent jobs in Gladstone.
The other is the QER oil shale plant near Targinie. The ban on oil shale production was lifted back in February, and the demonstration plant currently on site is looking to expand to a full scale operation. The site was previously home to the failed Stuart Oil Shale project which resulted in the demise of the Targinie township that previously existed.
So while people might only see LNG and coal, there's a bit more going than just those two industries. How long it will take for these two projects to get to the construction stage is still unknown.
Normal way - advertise via Agent / RE.com.au.
Properties have had little vacancy and I have been shooting for above average rents. It's been fine, 1 property = zero vacancy for last 18 months, the other perhaps 4 weeks total ($1100-900pw though!).
I think the vacancy figure is a little distorted due to a big release of high rise units onto the market (and they are asking too much).
There seems to be some oversupply (5.3% vacancy) but there is still very strong rental demand.
BUMP:
Would like to hear others thoughts on the future of the Gladstone market....
As we know rents have come back 15% and Sale prices back 15% due to the major oversupply.
What are the opinions regarding length of time of the current downswing and is the bottom close or is there a long way to go....
Would like to hear others thoughts on the future of the Gladstone market....
As we know rents have come back 15% and Sale prices back 15% due to the major oversupply.
What are the opinions regarding length of time of the current downswing and is the bottom close or is there a long way to go....
"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.
Our 3 bed 1940's house is still rented for $480 a week and once the lease runs out I believe we will need to lower the rent (advice from our PM)
We've just received DA to build 4 townhouses on this block after a 18 month battle with council. Due to the state of the market and having spoken to various agents we have decided to put the development on hold for the next 6-12 months and see how things go in the near future. Prices and rents have certainly dropped (hopefully we are close to the bottom of the market but who knows)
We've just received DA to build 4 townhouses on this block after a 18 month battle with council. Due to the state of the market and having spoken to various agents we have decided to put the development on hold for the next 6-12 months and see how things go in the near future. Prices and rents have certainly dropped (hopefully we are close to the bottom of the market but who knows)
From my own observations of the Gladstone market, prices do seem to have stabilised recently - for houses at least. There have been a lot of apartments and units completed in the last six months and this sector seems to have been hit a lot harder than the houses.
Rents and yields on the other hand still seem to be falling gradually across the board. On the renting side of the equation, I've managed to negotiate rent down on the place I'm in by $100 a week without any resistance.
Rents and yields on the other hand still seem to be falling gradually across the board. On the renting side of the equation, I've managed to negotiate rent down on the place I'm in by $100 a week without any resistance.
gladstone
i have 2 townhouses in gladstone - purchased in 2009 for $200k .. rent then $220/wk - the rent is now $350 & holding steady although i am expecting downside pressure - maybe to $320
i finally visited gladstone the other week for the first time & this is my take ..
i could not believe the number of new houses & new suburbs that have sprung up - with plenty more developments in progress & development sites marked out - quite unbelievable
the word oversupply came up time & time again & many investors have been left in a situation where they have paid top dollar for a 4x2 only to find on settlement that rents are $200/wk less than they had anticipated - saying stuff like 'but i was promised a rent of $x or $y'
prices have fallen accordingly .. i imagine there is a fair bit of negative equity about & a fair bit of unanticipated negative gearing going on - i imagine that some investors without long pockets will get hammered ..
with respect to rentals - i reckon it's a pretty mixed bag with opportunities in all sectors - i heard that people want to live on the island, away from the island, they want space, they dont want space, people want to buy, dont want to buy .. just about everything depending on personal circumstances - single v family, local v migrant .. it's a horses for courses game
there does seem to be a bit of migration movement going on .. some interstate movement to WA, some people coming over from WA & a fair few international migrants coming in from asia & NZ
i benchmarked my places at around $300k, which is probably off around $30k from 18 months ago - however i've just had them valued for a re-finance & they came back at $240k each .. it seems the valuers are predicting a bloodbath & anything with a gladstone tag is being greatly marked down - my response was find me a place costing $240k that rents for $350/wk & i'll buy the whole street!
i'm at the bottom of the market so i'll always be the cheapest in town & in demand, so i'm not worried
.. i envisage there will be significant buying opportunities over the coming year & i'd say i could go up there again in 2 yrs time & alot of those marked out development plots will still be empty
i have 2 townhouses in gladstone - purchased in 2009 for $200k .. rent then $220/wk - the rent is now $350 & holding steady although i am expecting downside pressure - maybe to $320
i finally visited gladstone the other week for the first time & this is my take ..
i could not believe the number of new houses & new suburbs that have sprung up - with plenty more developments in progress & development sites marked out - quite unbelievable
the word oversupply came up time & time again & many investors have been left in a situation where they have paid top dollar for a 4x2 only to find on settlement that rents are $200/wk less than they had anticipated - saying stuff like 'but i was promised a rent of $x or $y'
prices have fallen accordingly .. i imagine there is a fair bit of negative equity about & a fair bit of unanticipated negative gearing going on - i imagine that some investors without long pockets will get hammered ..
with respect to rentals - i reckon it's a pretty mixed bag with opportunities in all sectors - i heard that people want to live on the island, away from the island, they want space, they dont want space, people want to buy, dont want to buy .. just about everything depending on personal circumstances - single v family, local v migrant .. it's a horses for courses game
there does seem to be a bit of migration movement going on .. some interstate movement to WA, some people coming over from WA & a fair few international migrants coming in from asia & NZ
i benchmarked my places at around $300k, which is probably off around $30k from 18 months ago - however i've just had them valued for a re-finance & they came back at $240k each .. it seems the valuers are predicting a bloodbath & anything with a gladstone tag is being greatly marked down - my response was find me a place costing $240k that rents for $350/wk & i'll buy the whole street!
i'm at the bottom of the market so i'll always be the cheapest in town & in demand, so i'm not worried
.. i envisage there will be significant buying opportunities over the coming year & i'd say i could go up there again in 2 yrs time & alot of those marked out development plots will still be empty
The Gladstone story is pretty well summed up by this graph of stock on the market. Prices are likely to move North again when the stock has been re-absorbed. So I would be watching this space among other things including change in number of sales, and days on market. As others have pointed out, my understanding is that Gladstone is a long term story, and from what is in the 'pipeline' it would seem that it has a fair way to go.
Gladstone stock on market
Jen
Gladstone stock on market
Jen
Sorry Jen missing your point, how can you tell what the Gladstone market is doing from the SOM graph? Unless you are comparing it to Gladstone's population growth. I think a steadily rising stock is a good thing the town is growing, unless your on the ground you wouldn't believe the amount of building that is going on here. A Gladstone median property price graph would be a better indication, wouldn't it? Looks like the SOM has been pretty constant upward trend over the years however property prices have spiked over that time. Like in 2010 to 2011 property prices growing by $100 k in a year, yet no where on the SOM graph you can see a dramatic decline of Stock. As well as that looking at the post code 4680 is far to broad I'm pretty sure some micro markets have never gone backwards. It's a pretty safe bet to say Gladstone is a long term story infact most property markets are a long term story, some have growth spikes along the way.
Can you tell us what's in the pipeline?
Yes I can see what Jenko is saying here. Ideally you'd have a graph that showed the % of stock on the market.
No doubt there are outer estate H&L package and inner CBD apartment oversupply issues, although just looking at those actuals doesn't give the whole picture as the total stock has increased so much.
BTW as an investor, I'd go the houses in the inner, established burbs. Ex-OO stuff, close to airport with nice OO features like pools and/or gardens on the original nice wide streets (handy when you have 4 guys living in a 4 bedder house... they have a place to park). This is what I have bought and I've been shielded mostly from this blip.
No doubt there are outer estate H&L package and inner CBD apartment oversupply issues, although just looking at those actuals doesn't give the whole picture as the total stock has increased so much.
BTW as an investor, I'd go the houses in the inner, established burbs. Ex-OO stuff, close to airport with nice OO features like pools and/or gardens on the original nice wide streets (handy when you have 4 guys living in a 4 bedder house... they have a place to park). This is what I have bought and I've been shielded mostly from this blip.
I’m not on the ground in Gladstone, so am restricted to desktop research, which might complement the on-the-ground view provided by others. And yes, post-code is a pretty crude representation of a property market. In the case of Gladstone, 4680 takes in a surprising number of suburbs!
I agree that SOM as a percentage of population would be a better representation. I think though that while Gladstone population growth is high, it is probably not proportionally as high as the increase in SOM at this point in time. According to the August API magazine data, vacancy rates were a whopping 5.6%. That’s not to say that it will stay this way, though. Also, my understanding is that the land supply in Gladstone is not in immediate threat of being in shortage, unlike other areas that are more geographically constrained.
As previously mentioned, stock on the market is just one indicator of the balance between supply and demand, and should definitely be looked at in light of many other stats, median price growth being key. I do like John Lindeman's work (Mastering the Australian Housing Market) on the relationship between the trends of the key indicators, (Listings, Days on the Market, Vendor Discounting, Number of Sales, Median Sale Price), but agree that they need to be taken in context of population change, among other things. Having said that, mining towns do tend to defy these general trends and have their own pattern as per the attached extract from his book.
If you haven’t already seen them, these sites are an interesting read:
• Gladstone Regional Council Profile: http://profile.id.com.au/gladstone/reports
• Regional and resource towns action plan – QLD Government: http://www.dsdip.qld.gov.au/regional-development/regional-and-resource-towns-action-plan.html
• http://www.advancewesterndowns.com/major-projects.html
• Australian Mines Atlas: http://www.australianminesatlas.gov.au/
• And some recent articles:
o
o http://www.gladstoneobserver.com.au/news/region-population-to-double/1828655/
o http://www.beachsea.com.au/the-gladstone-story/
o http://www.propertyobserver.com.au/residential/rocky-on-the-rise-as-gladstone-stumbles-terry-ryder-hotspotting-rockhampton-gladstone/2013052261590
As for what's in the pipeline, you might like to check out The Australian Pipeliner ;-), or there are a few relevant documents you can view here:
• https://drive.google.com/folderview?id=0BzD62aU7hpIfTGhfV2JDelpsNmc&usp=sharing
Cheers
Jen
I agree that SOM as a percentage of population would be a better representation. I think though that while Gladstone population growth is high, it is probably not proportionally as high as the increase in SOM at this point in time. According to the August API magazine data, vacancy rates were a whopping 5.6%. That’s not to say that it will stay this way, though. Also, my understanding is that the land supply in Gladstone is not in immediate threat of being in shortage, unlike other areas that are more geographically constrained.
As previously mentioned, stock on the market is just one indicator of the balance between supply and demand, and should definitely be looked at in light of many other stats, median price growth being key. I do like John Lindeman's work (Mastering the Australian Housing Market) on the relationship between the trends of the key indicators, (Listings, Days on the Market, Vendor Discounting, Number of Sales, Median Sale Price), but agree that they need to be taken in context of population change, among other things. Having said that, mining towns do tend to defy these general trends and have their own pattern as per the attached extract from his book.
If you haven’t already seen them, these sites are an interesting read:
• Gladstone Regional Council Profile: http://profile.id.com.au/gladstone/reports
• Regional and resource towns action plan – QLD Government: http://www.dsdip.qld.gov.au/regional-development/regional-and-resource-towns-action-plan.html
• http://www.advancewesterndowns.com/major-projects.html
• Australian Mines Atlas: http://www.australianminesatlas.gov.au/
• And some recent articles:
o
http://www.abc.net.au/news/2013-07-02/gladstone-budget-allocates-140m-towards/4793192o http://www.gladstoneobserver.com.au/news/region-population-to-double/1828655/
o http://www.beachsea.com.au/the-gladstone-story/
o http://www.propertyobserver.com.au/residential/rocky-on-the-rise-as-gladstone-stumbles-terry-ryder-hotspotting-rockhampton-gladstone/2013052261590
As for what's in the pipeline, you might like to check out The Australian Pipeliner ;-), or there are a few relevant documents you can view here:
• https://drive.google.com/folderview?id=0BzD62aU7hpIfTGhfV2JDelpsNmc&usp=sharing
Cheers
Jen
