Iron Ore in free fall - Perth property next!

[grubar30]

Iron Ore in a tad trouble.


http://www.mining.com/iron-ore-free-fall-strikes-projects-miners-and-frightens-investors-57714/


Not looking good for Perth property...though the Perma Bulls will tell you otherwise.


Bottom line --> don't mess with the Chinese....if their melamine milk don't bring you down, their steel industry will.

 

[MTR]

Iron Ore in a tad trouble.


http://www.mining.com/iron-ore-free-fall-strikes-projects-miners-and-frightens-investors-57714/


Not looking good for Perth property...though the Perma Bulls will tell you otherwise.


Bottom line --> don't mess with the Chinese....if their melamine milk don't bring you down, their steel industry will.

Interesting times for sure, Perth property has been rising for the last 9 months, stocks so low RE agents finding it very difficult to source properties, and confidence coming back to the market - FHB and investors. I personally believe this market will continue to rise in the short term.

This negative news is more likely to effect mining areas, ie Karratha etc. BTW these areas have already seen a decline in property prices and rents.

THanks for the update

MTR

 

[thatbum]

...freefall? ...really?

Its gone down to $144/tonne - when it was nearly below $100/tonne a few months ago and moved back up to over the $150 mark.

 

[sanj]

I wonder who the perma bulls are he is referring to

 

[Ausprop]

ha ha, free fall, yup.

 

[one world]

Its not just iron ore. It's natural gas as well. Think of how many jobs at Woodside are on the line when that company's customers realize they are being overcharged for natural gas -a very cheap commodity these days.

Property may not collapse. But the talk of Perth's median price exceeding $1 million is irresponsible and totally misplaced.

I am in my 60s and have been investing for around 40 years. I expect stagnancy in Perth's inflation-adjusted median price. It's going nowhere for a decade. Nevertheless, for the true believers, there seem to be some juicy profits in the lowest decile of Perth property. There is good value to be seen in cheap, ugly old houses on large blocks.

 

[sanj]

Its not just iron ore. It's natural gas as well. Think of how many jobs at Woodside are on the line when that company's customers realize they are being overcharged for natural gas -a very cheap commodity these days.

Property may not collapse. But the talk of Perth's median price exceeding $1 million is irresponsible and totally misplaced.

I am in my 60s and have been investing for around 40 years. I expect stagnancy in Perth's inflation-adjusted median price. It's going nowhere for a decade. Nevertheless, for the true believers, there seem to be some juicy profits in the lowest decile of Perth property. There is good value to be seen in cheap, ugly old houses on large blocks.

I havent heard any of that talk, have you??

 

[one world]

I havent heard any of that talk, have you??

Most people on this BB expect property to double, like clockwork, every 7-10 years.

With Perth's median currently at around half a million dollars, there are way too many overly-optimistic people who THINK their IPs are going to top $1m in a decade.

Yes, there are cautious profits to be made in the lowest decile of Perth property. But anyone buying a normal house on an ordinary block for half a million dollars is going to be badly hurt.

 

[MTR]

Its not just iron ore. It's natural gas as well. Think of how many jobs at Woodside are on the line when that company's customers realize they are being overcharged for natural gas -a very cheap commodity these days.

Property may not collapse. But the talk of Perth's median price exceeding $1 million is irresponsible and totally misplaced.

I am in my 60s and have been investing for around 40 years. I expect stagnancy in Perth's inflation-adjusted median price. It's going nowhere for a decade. Nevertheless, for the true believers, there seem to be some juicy profits in the lowest decile of Perth property. There is good value to be seen in cheap, ugly old houses on large blocks.[/QUOTE]

I think you could be right as far as what is good value.

I have also not heard of Perth median hitting $1,000,000, if anyone believes this then they must believe in tooth fairies.

 

[Kent Cliffe]

Can't say I have either...

I mean where else in Melbourne and Sydney can you get this less than 5km from the CBD and close to the river/harbour:
http://www.realestate.com.au/property-unit-wa-maylands-113180839
Not that I would buy this... but an example.

If these bulls keep saying the Perth/Australian property market will go down, you'll eventually be right or as Keynes says; dead.

 

[Ausprop]

Its not just iron ore. It's natural gas as well. Think of how many jobs at Woodside are on the line when that company's customers realize they are being overcharged for natural gas -a very cheap commodity these days.

Property may not collapse. But the talk of Perth's median price exceeding $1 million is irresponsible and totally misplaced.

I am in my 60s and have been investing for around 40 years. I expect stagnancy in Perth's inflation-adjusted median price. It's going nowhere for a decade. Nevertheless, for the true believers, there seem to be some juicy profits in the lowest decile of Perth property. There is good value to be seen in cheap, ugly old houses on large blocks.

ok there is so much nonsense in here.... firstly to suggest that SS has more insight into gas pricing than the customers of woodside themselves is an insult to their intelligence. I don't think I have ever heard talk of Perth medians of $1m but it will naturally happen throughout all cities as it's just inflation. Inflation adjusted medians is another matter as medians are very misleading, as a median house of 40 years if identified is now worth millions so is no longer a median house. As growth continues as far as those future suburbs on the forest hwy I pity anyone that would have to live in such a median house, nonetheless it remains the dream for many. Have no idea why you think a given property won't grow in real terms given the place is bursting at the seams, but we all need to take positions to form a marke

 

[one world]

I have also not heard of Perth median hitting $1,000,000, if anyone believes this then they must believe in tooth fairies.

Plenty of people falsely believe that the Perth median price will double every 7-10 years.
These days, overly exuberant investors are paying half a million dollars or more for single-residential IPs in Perth in the anticipation that prices will rise even more in the next decade.

ok there is so much nonsense in here.... firstly to suggest that SS has more insight into gas pricing than the customers of woodside themselves is an insult to their intelligence.

Nobody's being supercilious here. Look at what Woodside's customers are paying for natural gas. Then look at the spot price for NG in the USA. One does not need to be a Rhodes scholar to spot the huge difference? Woodside has plenty of irate customers on its books who are locked into massively higher prices. Eventually, something has got to give.

 

[grubar30]

Iron Ore to go back to $100 per tonne....straight from the horses mouth.


http://au.ibtimes.com/articles/444381/20130311/rio-tinto-iron-ore-prices-go-down.htm


We know WA economy lives and dies by the Iron.

How long before this filters down into the local WA economy.

 

[Ausprop]

We know WA economy lives and dies by the Iron.

in 1975 perhaps

 

[one world]

in 1975 perhaps

And what else does WA have?

- Natural gas. Spot prices in the USA have crashed and Woodside's locked-in customers are irate.

- Gold. Trading near all time highs despite minimal signs of inflation

- Iron Ore. Maybe someone can post a chart of real Iron Ore prices so we can get a picture of how expensive it has become relative to what is available elsewhere.

I don't think WA property prices are headed down any time soon. But the median price of WA property is going to be stagnant for a long time to come.

 

[Ausprop]

And what else does WA have?

- Natural gas. Spot prices in the USA have crashed and Woodside's locked-in customers are irate.

- Gold. Trading near all time highs despite minimal signs of inflation

- Iron Ore. Maybe someone can post a chart of real Iron Ore prices so we can get a picture of how expensive it has become relative to what is available elsewhere.

I don't think WA property prices are headed down any time soon. But the median price of WA property is going to be stagnant for a long time to come.

if we want to be this simplistic, substitute "WA" with "Australia" - and if you truly believe that's all this economy does then fair do's

 

[Aaron Sice]

free fall? what the fudge?

Fe ore was under $80 at one point not so long ago.

Now it's moved down slightly from $150 to $144, and it's in freefall?

Awesome - i look forward ot picking up FMG at under $1 again, or maybe RIO @ $39.

No? Can't see it happening?

Well, you must be a perma-bull, then.

 

[Aaron Sice]

- Gold. Trading near all time highs despite minimal signs of inflation

fail.

all time high was $1900+/oz

is now struggling to keep it's head above $1560/oz.

considering the amount of money in the system now, Au should be close to $3400/oz with historical pricing indices applied.

all time highs? nope. not even close.

 

[HiEquity]

This thread is hilarious!

A few points:
- Iron ore got down to $86/tonne last year but Perth is still here. $144/tonne is a fantastic price - everyone is making good money. $100/tonne would still be a good price - I'm not aware of any major producer with costs that high (Atlas may be close - it's hard to tell) so they would still be making money - just not as much as before. BHP and Rio have costs less than half that figure and even FMG would be doing fine. Gina is still spending big dollars on Roy Hill - lets hope she can get some banks along for the ride at some point... and Rio are still expanding.
- Natural gas projects are fully contracted! There is no way those companies are getting out of those positions so who cares if they feel irate? Pluto, Gorgon and Wheatstone (more than enough for us to be getting on with for a start) are away and Browse is still being developed either at JPP or Floating LNG (my guess at which way they'll jump) - perhaps there is something about the natural gas market you don't understand? It's not all about the price of gas in the USA for a start...
- Gold mining in WA has ticked along nicely for over 100 years. Hard to see that changing...

What was the point again? One thing I will say is the project development market is cactus - most new major projects (Crosslands / OPR / Southdown / Outer Harbour / etc) are either canned completely or effectively in "care and maintenance" mode courtesy of the price gyrations in these commodity markets and the high cost of labour, so there is a world of pain right now for consultants and project developers at the front end who now have no work to do. This lack of new projects coming on will flow through to everyone else eventually but the investments that are already locked in will ensure it's a relatively soft landing for some time to come...

 

[one world]

fail.

all time high was $1900+/oz

is now struggling to keep it's head above $1560/oz.

considering the amount of money in the system now, Au should be close to $3400/oz with historical pricing indices applied.

all time highs? nope. not even close.

Lots of people who rode gold back in 1979-1980, when it was at its peak and when the world was suffering from stagflation, would beg to differ. I respectfully submit that you take a look at the saw-tooth shaped chart of gold from back then. It took decades for the gold price to recover from its abyss.

Why oh why do people insist on buying things at the top?

The time for gold was 2000. At that time, nobody was bullish on gold.

As for iron ore. Yes, there is a huge demand for the stuff. But if you chart the inflation adjusted price going back 40 years, its clearly expensive. Trees do not grow into the sky. Something has got to give.