Investing in regional NSW questions (Peak Hill)?

[13910]

Hey guys,

I'm interested in getting some opinions from the experienced folk on this forum. I'm weighing up my options between paying bigger money to invest in a coastal area, close to a CBD like Newcastle or much smaller money (about one sixth) in a regional area. One regional place that has caught my eye is in Peak Hill.

Just wondering if any of you invest in regional areas like this? What are the pros, cons of doing so?

I presume capital growth is slow, at best. Some figures I've seen suggest Peak Hill has been - relatively - booming over the past two years, but I don't give much credit to this data as I presume with lower volume of sales it doesn't take much to skew this data.

The particular property that's caught my eye will be considerably cash flow positive after a reasonable overhaul, but my concern is - what supports these types of economies? It seems unlikely that you'd wake up one day and the entire community is gone, but equally it wouldn't take a whole lot for that to be the result.

Look forward to learning from y'all.

Cheers
Greg

 

[Propertunity]

Mmmm,

You're talking about a town with a population of just over 1,000 people.

There are 20 - 30 RE sales made annually in this place.

PR Data has CG in 2009 at +32.4%
PDS Live has it at almost the same but in the other direction -34.3%

This is the kind of wild fluctuation you get with such low numbers - both are statistically unreliable IMO. There have been 9 sales there in 2009.

With respect, this is speculating at best and gambling at worst.

Mayfield (in Newcastle - just to pick one I'm familar with) on the other hand has had 100 sales already this year and normally 200+ sales per annum.

The growth figures published for there tend to be a bit more believable.

How can you make an investment decision if you cannot measure properly? Or the measurements are valueless?

 

[Nathan]

i wouldnt touch it.

better places to put my $$.

You need a 10k + population to invest

 

[gg1965]

Hi all,

Let me qualify myself first, I grew up near Peak Hill and I know it well.

It is a small town and the figures are distorted because of it's smallness. It is about a 45-50 minute trip to Dubbo which is too far for daily commuting. In the other direction, it is closer to Parkes though but not many people would do that commute as house prices and services in Parkes are better.

Peak Hill was a mining town in it's hey day but now it is just one of those annoying towns you have to slow down to 60 to drive through and then speed up to get the he11 out of there.

There are about 2 small motels in Peak Hill that hope to get the tired driver on the Melb-Brisbane route but most of those drivers stop at either Dubbo or Parkes for their rest and play. At least those towns have a night life. There are also two servos in Peak Hill that rip drivers off.

The hospital in Peak Hill is old and not reliable for those who want to call this town home and it's only claim to fame was some old lady in an iron lung who used to get wheeled out onto the verandah to watch the trucks go by. she died a few years back so you cannot even look for her on the verandah as you drive through.

It was once a mining town and there are rumours that many excess WW2 equipment got driven into the mines there and then they blew the mines up - therefore burying it all. But for the sake of the tourist buck, they have open the open cut mine as a tourist attraction, but to be frank, is this the type of attraction that you would stop and see?

Honestly, if you are keen on a regional centre, then look at either Dubbo or Parkes. I bought a place in Dubbo last week and it is a very comfortable 4 bedroom on a good sized block and i am getting 285 per week for it - after paying around 250k for it. Plus Dubbo is growing in population and is on Bernard Salt's list as growing in the next 15 years. Dubbo is a catchment city and also has a campus for Chales Sturt Uni and a thriving retail sector.

Parkes is also a good alternative and watch this one carefully as there are plans to put an international freight air terminal there to export primary produce directly to Asia. Watch that - it isn't definite yet but is something to watch. Also, if the VFT from Melb to Bris goes via the country route then it will stop at Parkes. So keep that in mind as a possibility. Loook at opportunities like these and not just figures from the magazines as they tend to be distorted due to smallness of towns and also large one off sales that may affect all median calculations..

Check out the council web pages for council news and development applications and read the regional papers on online. That is what i do as then you can get a feel for what is happening. That way you can find out if there is any other external interest in a town.

The house i just bought in Dubbo just happens to be located about 800 metres via walking trail to a new Woolies and Big W which is due to open at the end of the year. Watch for things and events like that and you only gain an understanding of that if you read the online newspapers and council notes.

Propertunity has mentioned Mayfield in Newcastle. That is a far better proposition compared to Peak Hill. You can pick up 2-3 bedroom homes there for around 250-280k which may rent for about 280-300 per week. I can vouch for Newcastle itself (certain areas though) and i am confident enough of the city that i am putting offers on 3 different houses there in the next few days. But i only got that confidence by DD and research (reading news, council papers, RP Data) and spending time there to suss out the place (it also helps tjat i used to also live in Newcastle).

So bottomline, don't just rely on stats from the magazines etc. Get out on the road, do your DD and research (and go for places that are a catchment area and have good services and industry there).

Hope this helps.


g

 

[jrc]

I'd support G in suggesting Dubbo and Parkes would be better. There is some mining exploration around Peak Hill again which might give some benefit to PH but i think Dubbo and parkes will get more benefit.

I think the International Freight at Parkes wasn't successful. There is an intermodal freight operation around there.