NSW Riverna Murray (Jerilderie - Macquarie bank investing) & Port Augusta

[Boost]

Hey all

I've been on the prowl looking for an IP. My recent efforts to virtually grab a freestanding single title house in SA's Elizabeth and Davoren area have been unsuccessful (I was there in Jan last year & could have secured one for $95k- now i'm cringing). So, in the mean time I've shifted my attention to Port Augusta and the NSW Riverna Murray area - specifically Berrigan, Jerilderie & Deniliquin, Finley.

I've been doing most of my research on google and have focused on Jerilderie. Macquarie bank has invested $1 billion into the area for live stock basically for the demand on the Aust. meat industry and also bought up hectares of land. My understanding was that the area is going sideways due to drought and local farmers having to sell up due to financial stress.

Macquarie's investment in the town has had me thinking...is it a strategy for financial losses against their portfolio? Could it be genuine - which to me would indicate a future growth to the area as wage jobs would be created.

What are your thoughts or twists on this?

Port August seems safer to me? But Jerilderire is showing potential.

I'm looking in these areas due to the price - under $150k. I already have one property (18mths now) and prefer not to get into the bigger figures until I see good growth in the first. However, in the interim i'm trying to follow the poplulation, the demand and prices around $150 - preferably less!

 

[Sim]

Port August seems safer to me?

What would be your reason for investing in Port Augusta ? What factors do you believe will drive growth in that town ?

(PS. I know the town well, at least geographically - I was born there. Haven't lived there for for about 27 years though! ... so I don't actually know what the local economy is like at the moment)

 

[Boost]

What would be your reason for investing in Port Augusta ? What factors do you believe will drive growth in that town ?

(PS. I know the town well, at least geographically - I was born there. Haven't lived there for for about 27 years though! ... so I don't actually know what the local economy is like at the moment)

The reason I am looking at Post Augusta is due to the minng industry growth and the effect this would have on supply and demand.

 

[topcropper]

I've been doing most of my research on google and have focused on Jerilderie. Macquarie bank has invested $1 billion into the area for live stock basically for the demand on the Aust. meat industry and also bought up hectares of land. My understanding was that the area is going sideways due to drought and local farmers having to sell up due to financial stress.

Macquarie's investment in the town has had me thinking...is it a strategy for financial losses against their portfolio? Could it be genuine - which to me would indicate a future growth to the area as wage jobs would be created.

!

I doubt Macquarie has bought a billion dollars worth of land. The whole fund was only going to be 200 million or so.

If Macquarie has put together a heap of land, it would be existing smaller farms. So those farmers go to the city, or retire to the coast. The new much bigger farm will be far more efficient and have less workers than the older smaller farms. It's always a net loss of workers. Been like this for 200 years as farms get bigger and more efficient. Wage jobs wont be created. Wage jobs will decrease.

Macquarie wouldn't be doing this to make a loss. They are doing it for the capital gain of rural land which has equaled most average city real estate for as long as time began. With whats happening in China and India and agricultural commodity prices, I suppose they think rural land will do better than what it's done before and I agree.

See ya's.

 

[Sim]

The reason I am looking at Post Augusta is due to the minng industry growth and the effect this would have on supply and demand.

I'm interested to know if you think there is any real evidence that Port Augusta itself will benefit from such a demand ?

I'm a little skeptical about regional towns benefiting from the "resources boom" if they aren't directly involved in supporting a mine or processing plant. About the only thing Port Augusta has is a big power station (which supplies Roxby Downs and Olympic Dam).

I'm not saying that Port Augusta won't benefit from a state-wide surge in property prices, I'm just not sure how much it will get by way of direct demand (happy to be shown examples to the contrary!!).

You need to think about where the mines are in SA - the majority of the excitement comes from Olympic Dam, which is serviced by Roxby Downs. I'm not sure if there is much business based in Port Augusta which supports Olympic Dam - I see no reason to base your business in Port Augusta when you could either base it in Roxby Downs / Olympic Dam village or in Adelaide (or even interstate) ? Again, I'm happy to be shown examples of businesses servicing mines like Olympic Dam from Port Augusta - I really don't know (I worked at Olympic Dam about 14 years ago, so I only know what it was like back then).

About the only thing I could think of is the continuing supply problems of housing in Roxby Downs leading to people living in Port Augusta instead - but it is a 3 hour drive to Roxby, that's one helluva commute (although mine workers on a 4 day on - 4 day off rotating roster living in the single persons quarters with family living in Port Augusta might work okay).

Whyalla is certainly getting some benefit from the resources boom, with the local resources processing industry clawing back some of its former glory ... and I think there are some mines nearby on Eyre Peninsula.

I'm not sure what is happening in Port Lincoln - probably too far away from everything to get any benefit ... similarly Mt. Gambier - not sure what resources activity there is in the south east.

Would be curious to learn what people know about the local industry in Port Augusta these days.

 

[Boost]

Would be curious to learn what people know about the local industry in Port Augusta these days.[/QUOTE]

Fantastic replies coming from this...thanks. I too am interested to further know what is currently happening there...I'm feeling slightly confused about it, the areas around it (stretching far & wide!) have things going on...Whyalla may be expecting a desalination plant to accomodate water supply which would stream to Whyalla, Port Augusta & Port Pirie to ease off the Murray.

Other thoughts I'm having is the need to transport resources out of Roxby...Port August is the closest Port??? According to the councils website, they are want to ensure Port August is not negatively impacted by the resources boom in S.A are seeking ways to protect the area and cash in on some of the growth.