Karratha or Gladstone

[reeco]

I think the basis of trying to compare Karratha and Gladstone flawed and apart from resourced based growth, they are leaps and bounds apart.

I agree with Bigtone, in that i can't see Karratha growth and yields coming to fruition in Gladstone, but i definitely see good solid growth over the medium term.

I'm still interested on what you consider a satellite area of Gladstone? Calliope, Miriam Vale and Benaraby would be the closest linked towns to Gladstone i would have thought.

Calliope has seen an explosion of growth and new developments over the past 3 years and it is due to this growth and new builds that gives the misleading figures/stats.

Previously it was a sleepy back water but has changed significantly over the past few years. It still is the first area to go off the boil when things slow down in Gladstone.

Calliope..nice place. Anything with a pub is what I consider a satellite town. So calliope gets a big tick from me..
Went through the worst parts of gladstone near tannum sands 2months ago. What a sh#thole. Where i stayed near the airport was a bad spot too. I'd hate to see the health reports on the long term residents of Gladstone. All the aluminum and bauxite dust floating around in the air made me blink a lot! Heavy industrial areas of Gladstone are pretty ful on. Those massive aluminum smelters and plants are a worry. You seen that big *** red mud lake just past tannum sands?? Mate that place sent chills through me... Anywho Miriam vale I thought was a lush place in the hills. Nice and green.

If I had my kids I'd live away from Gladstone and away from the stacks. Who knows what spills outmof those things and into the air

 

[csc2]

With certainty there are just a few who travel from Rocky to G/stone daily for work...........Its pretty much a non event.

The LNG plant will be going ahead, 110%

I have a source within LNG that has told me that its a certainty...

The recent negative feedback in the papers caused from testing of water was corrupted and was very much incorrect..The test results were definitely incorrect.............The media has not yet pounced on this VIP info hence many think that the LNG project is still all up in the air.

I know of a contractor who has many millions of dollars worth of machinery operating and he is not losing any sleep as hes still full steam ahead with the trenches.

I dont think the LNG project would be going full steam ahead in the background if there was any doubt that this huge project was in jeopardy.

 

[reeco]

With certainty there are just a few who travel from Rocky to G/stone daily for work...........Its pretty much a non event.

The LNG plant will be going ahead, 110%
.

There's no doubt itl go ahead. Gladstone screams a scene outta Eric brockovich.

Once people get a taste of high real-estate prices I guarantee that "non event" will change. Guess you have to have experienced it to understand that part of the idea.

But I agree. Gladstone is a go. A friend of mine is doing the headworks for it now

 

[james_w]

seems to be alot of buzz around about gladstone in with some more projects in the pipe line

I also like satelite towns such as calliope etc

 

[reeco]

seems to be alot of buzz around about gladstone in with some more projects in the pipe line

I also like satelite towns such as calliope etc

Are you from there james? Is that why you have that nice big link as your sig? What areas in particular do you think will see gains. Those that are listed in that link?

Cheers

 

[grossreal]

hi all
the question is if you could buy a 2 br in karratha or gladstone which would you buy
I will say I have an interest in gladstone
who is interested in
a houses
b units
in a new township

 

[csc2]

i think anyone who maybe chasing short term profits should be looking at gladstone...there will be way more buyers around soon enough than in karatha.......

its all well and good to buy somewhere, watch their value increase but when it comes time to flick, you need buyers available...and gladstone is the best option of the two in my opinion by a country mile..............

the bonus is gladstones diversification of industry...thats the key.

aluminium industry, the port, gas, rail and general work population to name a few quick ones...

 

[mattnz]

Thats 17% per annum for 3 years, that would be a minimum expectation for a booming Gladstone with 10,000 extra workers needed in that period.

Today = $350k
1 year = $409k
2 years = $479k
3 years = $560k

Just digging out this old thread. The Gladstone median is now $482k and we aren't yet at the 2 year mark from my original prediction. Construction work on the major LNG projects hasn't even started yet. Definitely feel like we are on track.

http://www.propertyobserver.com.au/...ter-as-first-home-buyers-return/2012031253810

 

[powderfingers]

Definitely on track with your forecast there Matt,
and this in today's Gladstone paper:
http://www.gladstoneobserver.com.au/story/2012/03/29/values-jump-gladstone-property-market/

 

[scottscruffy]

Advice

Can I get some info on the house you purchased as there is nothing at that price on the net?

Gladstone is definitely my pick. I just settled yesterday on a 3 bed refurbished, fully furnished house on 868 sqm for $352k. It is renting for $360 pw now and I see that increasing in coming months.

The block is zoned high density residential, and talking to the council, they would rather I put units up, instead of subdividing. With future growth in Gladstone and the opportunity to build up to 6 units, it is a no brainer for significant capital growth. I see $1m profit as a realistic goal in the next 5 years from this purchase (put the house on another block that I subdivide, spend $200k per 2 storey townhouse and onsell each for $400k).

For the price of one house in Karratha you could buy 3 in Gladstone, while paying less in Stamp Duty. The chances of 3 Gladstone houses increasing in value by $600k ($200k each) is much higher than the chance for a $1M house in Karratha to increase to $1.6M.

If you are buying for potential capital gains and very limited downside potential, Gladstone has to be the way to go.

 

[Rooster]

Can I get some info on the house you purchased as there is nothing at that price on the net?

You quoted on a post from June 2010. The market has moved a fraction since then....

Rooster

 

[b simpson]

I think Karratha has over cooked a little, at least for the short term. If Pluto stage 2 kicks in things could be different.

Longer term it does look promising though as it moves to a city status.

Currently building the first high rise appartments and a decent aquatic/gym/sports centre.

Not sure what the high rise appartments are going for, but they would be highly sort after i reckon as there is nothing else like them here..

 

[MTR]

Update anyone (Karratha)

Hi all

just wandering whats going on, anyone in the know.

I see the market swamped with rentals and houses for sale, it is heading for a crash, or minor correction, I think it has already started dropping.

Would like further info on those who know/understand this area.

Cheers, MTR

 

[HotRod]

Not knowing the area intimately (but I do invest in the NW) I think it's a combination of:

• Rio delaying projects;
• The government releasing land;
• developers building accommodation; and,
• Coming up to Christmas with people leaving town.

I suspected a 20% price reduction off the peak to be reasonable, with a 20% increase in the housing supply with the new land releases. Prices are determined by the rent with yield being about 9% historically. Some properties being sold now are as low as 8% yields, which suggests properties are overpriced as rent drops to met the demand.

Just happens to be exacerbated with the downturn in IO and the time of the year.

A 20% drop might be viewed as a crash in any other market, but with the large and rapid increases in recent years, this is probably closer to a correction in the market.

JMHO

 

[MTR]

Hi Hotrod
just a little concerned as a friend is looking at developing I think its either 6 or 10 unit site in Karratha, she believes there is 30% profit in it, but if the market is going south this can diminish very quickly, along with the fact that this is her first development. Karratha is perhaps not the best place to cut your teeth on development project.

Cheers, MTR

 

[HotRod]

If she does his DD based on the peak prices, I think she will be in for a rude shock.

But depending on how long it takes to do, she might be fine come the middle of next year.

Weather is better and people tend to move to the NW that time of the year. IO might have stabilised and RIO might have thrown a few projects back into the mix.

But, it's all a matter up to her DD.

Me, I wouldn't, but others might do nicely.

 

[mattnz]

One thing to watch out for is there could be a significant difference between advertised prices and actual sales. Need to beware that you don't work out the profit margin from the wrong one.

 

[MTR]

Mattnz
That is a good point, keep the figures real.
Some look at selling price assuming they will come in close but when the market goes south as we know sold prices can vary greatly.

Cheers, MTR

 

[MTR]

If she does his DD based on the peak prices, I think she will be in for a rude shock.

But depending on how long it takes to do, she might be fine come the middle of next year.

Weather is better and people tend to move to the NW that time of the year. IO might have stabilised and RIO might have thrown a few projects back into the mix.

But, it's all a matter up to her DD.

Me, I wouldn't, but others might do nicely.

Me too, I don't think I would have the courage to touch this market at the moment, get a bad news story in the paper and it can cause havoc.

How are you fairing with your properties, have you had to drop the rent?? I undestand you jumped in at the right time so there will be very little pain, but just interested on how you are travelling with these IPs.

Cheers, MTR

 

[venno]

I have been following the market in Karratha (a couple of properties in particular) and it seems that asking prices are finally starting to adjust in line with the fall off in rents, particularly on the stock that has been sitting for a while.

I keep getting calls from a local agent on 1 place in particular that he's indicating could be picked up around the 760k mark (4/2 Baynton 2006 build) and they have just finally managed to relet it at $1450pw.

Starting to look a little better as this opens up the scope for some CG (prop is below replacement cost) and future rent increases (previous rental history was long term company lease at $1850, damm rents have fallen off up there).

Also had a look at South Hedland (4/2), fantastic rents with some long company leases ($2800pw) but the entry price is high (asking 1.1M).

Have to wonder about future pricing for both towns given the impending land releases and construction activity. The gov seems to want to try and normalize these places so that boom/bust and high cost of living reduces.

Karratha is actually starting to look tempting again on the proviso that it has currently slumped to somewhere near the bottom of its cycle.