Karratha

When will the demand for the camps start to decline and placement of staff into housing look attractive again??

If the camps became less profitable, and that will happen over time as demand decreases, they wind down and the pressure goes back into the rental market surely.

This is what I would like to see obviously.

Ausprop, I checked Realestate.com rentals and it seems that 3x2 = $12-1300 bucks per week ATM if that is any guide. I am waiting on some information from my "astute" PM ( the third for the year so far) about reletting my place as GROH are not showing any hand yet. Unless something happens that I am not seeing, I am looking at a considerable drop, from $1700pw to probably $1250??

Without getting the calculator out, thats more than 20%....Bugger!!
 
Pango, I contacted GROH regards leasing and you can do it direct with them (The NW coordinator sent me a form to submit a property for GROH consideration).

She said that at the moment they don't require anything in Karratha (they have enough on their books) but that may change in the new year. She did say the have a shortage in South Hedland and are actively looking.
 
sash said:
The Moranbah vacnacy rates have increased dramatically....some of the lemmings who bought will panic and there will be a flood of properties on the market. This will drive prices down...in a mining town it will be more pronounced....at this point it will be time to buy. This will take time. Coal will still be in demand....the companies just need to sort the unions out!




Hmm.......anyone who is telling you $1100 to $1200 furnished for a townhouse is telling porkies..this is what Karratha properties will rent for. Fully furnished houses (4x2x2) are getting $800-$900. The other thing I was told by local agents (multiple ones) is that most people have their own furniture. So a 4x2x2 will rent on average for $600-750...with most renting around the $620-680 mark.

As for supply it is increasing not decreasing...a lot of people jumped in. So prices will not move as aggressively next year. Not saying that Gladstone is not viable...just need to be realistic in terms of returns.
Click to expand...
Sorry Sash
Your off the mark as far as Karratha is concerned.
I live in Dampier, 10 minutes from Karratha and I have an investment property in Sth Hedland and I keep a weathered eye on the local market.
The property market in Karratha is slow for sales and there is more accommodation available now than there was before Woodside basically completed construction at the Pluto project. Rents have come back a little but prices in Bulgarra (Karratha suburb) have held up, whereas in Millars Well and Nichol the market has softened.
The future promises construction of Pluto 2 the second train, an expansion of the fertiliser plant.
Personally I think the property market in Sth Hedland is stronger with more upside. (NB Sth Hedland is not Port Hedland separated by about 10km and you need to know your market if you want to invest in either of these places.) The property section of the North West Telegraph suggests there has been very little downturn in the rental market in Sth Hedland if any and my property is returning $1600/wk at a cost of $750000 and my tenants have recently resigned there lease.
 
Just going through the steps to put a granny flat out the back of a place in Karratha, Lived there for 15 years have lots of friends that are keen to get out of mum and dads home but cant afford it. seems like i should be able to rent it for around 450-500pw cost 120K all up
 
Are we disagreeing?...I agree that Karratha (Greater) is generally slower and going to get slower...see below

http://www.realestate.com.au/rent/between-0-1700-in-karratha+-+greater+region,+wa;+/list-1

I agree that Sth Hedland is steady and not doing badly. See below

http://www.realestate.com.au/rent/b...land,+wa+6722;+/list-1?source=location-search

The real issue is that is more costly to build in Hedland than Karratha.

Pluto said:
Sorry Sash
Your off the mark as far as Karratha is concerned.
I live in Dampier, 10 minutes from Karratha and I have an investment property in Sth Hedland and I keep a weathered eye on the local market.
The property market in Karratha is slow for sales and there is more accommodation available now than there was before Woodside basically completed construction at the Pluto project. Rents have come back a little but prices in Bulgarra (Karratha suburb) have held up, whereas in Millars Well and Nichol the market has softened.
The future promises construction of Pluto 2 the second train, an expansion of the fertiliser plant.
Personally I think the property market in Sth Hedland is stronger with more upside. (NB Sth Hedland is not Port Hedland separated by about 10km and you need to know your market if you want to invest in either of these places.) The property section of the North West Telegraph suggests there has been very little downturn in the rental market in Sth Hedland if any and my property is returning $1600/wk at a cost of $750000 and my tenants have recently resigned there lease.
Click to expand...
 
Update please on this market

Hi All
for those who understand/know this market I would like your view on what is happening.

From what I can see there seems to be too many properties on the market and also too many properties for rent. Can anyone enlighten me on this???

I have a friend who is ready to develop in this area, I think it has tanked, any thoughts on this.

Cheers, MTR
 
HI Jonesy
If this is the case, then why would prices go up if there are now cut backs, I would expect prices to drop, including rents. Am I missing something??

Cheers MTR
 
MTR said:
HI Jonesy
If this is the case, then why would prices go up if there are now cut backs, I would expect prices to drop, including rents. Am I missing something??

Cheers MTR
Click to expand...

prices of contractors per hour I think is meant? however I would have thought the contractors leaving would have been workign for BHP anyway, else why leave if your hourly rate is on the increase?
 
The property price and the rental price have gone down, compare to 6 months ago. We were about to purchase one 6 months ago. Asking price was above $900k, we offered mid $800k. At first the seller did not accept our offer the few weeks later the dropped the price to the same amt as our offer. We changed our mind and did not see that the rental price would sustain to that level. So we looked at different location instead.
 
1.2.3.4
Even at $800K that is big $.
So now that you have moved on, will it still be a mining town?

Cheers, MTR
 
Just heard from my PM that GROH will not be renewing the lease after the 5 year term expires next month.
She mentioned that they were reducing the number of Govt personnel in town so had no further requirement for it. This may be hogwash?
Possibly that there is so much new stock available that at 7 years old my property is just not in the game. There has been a lot of houses go up there and now that activity is down, as mentioned in previous posts, there is just too much to chose from. This time of year is also a poor time to have it come onto the market.
$1700pw down to "hopefully" $1250pw is the reality. Whilst this is a bummer, I have always allowed for this to happen and therefore can absorb the sudden drop. You have to have a suitable strategy when investing in areas like this that can be very reactive to the swings and roundabouts that these kind of places experience.

Ausprop, you seem to have good insight into the reduced activity there by BHP and others. Can you add anything that might show that this is only a temporary slump, or do you think that we have seen the best and only more of this downturn to come?
Look forward to hearing what you have to say...maybe in more than 6 words :))
Cheers
Pango.
 
I think that prices will take a hit.

When I bought the place in 2006 I was getting $1200pw. At $625k it still represented good yield so I guess I am back to where I started.

I have had rents or $1200, $1400 and $1700pw over the stretch so CF has been good.

Im in for the long ride so it dosnt make any difference to me really, and I only buy stuff that can stand up on its own.

This time next year it could be back to $1500pw.

Who really knows??
 
Interesting reading this thread.

At the moment in town, Rio Tinto has committed to building 1000 houses for staff which is quite a few as they are still continually building and buying houses, a complete flip from 3 years ago and more staff than ever are now housed. But there has also been a drop in Iron Ore pices.....so who knows where that will go?

Woodside has reduced the number of people in town since the conclusion of Pluto but like everything Woodside will expand and these people will come back to town and the Woodside wave starts again people coming and going.

Goverment has committed to more offices when space is available so could be a few years down the track as the centre of town is being completely redeveloped.

At the moment there are 2 new estates being constructed, both are expected to Yield around 1000 houses each. The latest estate is going through approvals at the moment and that will yield 2000 houses plus mixed development and my guess that would be at least 3-5 years away

Though one saving grace has been some companies up here are trying to get away from the FIFO workers as housing is now starting to become available and affordable for rent/purchase, where as in the last 5 years small companies haven't been able to justify these prices for accommodation.

There is also meant to be a Port being built at Anketell 25kms West of town for Iron Ore exports with companies such as Aquilla and FMGL wanting to build railways into there but whether it will happen is another story....it's approved and everything just awaiting construction when it becomes viable.

Hopefully this info is of interest to someone, just thought I'd share it. Personally I can't see the housing prices return but you never know!
 
mattnz said:
The real concern is what a large drop in rent does to the property value. Any thoughts?
Click to expand...

That will take a hit as property prices in Karratha have been around the 9 to 10% yield range, so a 20% rent drop should equate to a 20% drop in value. Taditionally propery is sold on the high yield as the attractor. BUT, the cost to buy a block and build a reasonable house should set the supporting base price and hence the rent based on the 9-10% yield.

e.g. The cost to buy a block and build a 4x2 would cost say $700K (a guess) and thus the rent would be about $1300 to $1400pw at a minumum.

Can't see yields dropping below that 9 to 10% range, but can see values and rents dropping to match that yield.
 
DaneS said:
You may be better served looking into smaller towns like Newman & Onslow, Newman in particular has a drastic hosing shortage, all local hotels are permanently booked out and rental returns of $3,000 per week for a decent house. Much can be made if you have the land an can develop further.

www.tchomes.com.au http://www.flickr.com/photos/thermalcomfort
Click to expand...

Which the will be as land is opened up as native title issues are resolved.

All NW mining towns will be going through this process with the double whammy of the mining "downturn".
 
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