on the other hand maybe I am a dinosaur that needs to get over it and move on
Haha, I will be watching it closely.
Cashflow is good, but then if it sits on the market for 2 months cos it wont rent then you really are up the creek.
Onslow - Thoughts of regional investors pls
- Thread starter sanj
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Haha, I will be watching it closely.
Cashflow is good, but then if it sits on the market for 2 months cos it wont rent then you really are up the creek.
Desal is a definite for Onslow and Wheatstone. Likewise a new power station. Sure Wheatstone is only one industry but it's the most stable type of industry imaginable. Locked in thirty year contracts - nothing like iron ore with all its exposure to the spot market.
The risk is that both Landcorp/WAPC release too much land for the ongoing population and someone eventually works out how to build cyclone proof prefab houses of good quality up there cheaply. Without both things happening, prices won't be going down much.
Personally, I have enough exposure to the Karratha market already. Probably don't need anymore in the region. In Karratha the first condition has been met - there is plenty of land supply. But overall build costs are still expensive so that will limit the downside for now. Still, government has been dead-set on reducing rents in all these communities by a raft of measures to increase housing supply. Hopefully with the Nationals no longer having the balance of power some of that pressure will come off...
The risk is that both Landcorp/WAPC release too much land for the ongoing population and someone eventually works out how to build cyclone proof prefab houses of good quality up there cheaply. Without both things happening, prices won't be going down much.
Personally, I have enough exposure to the Karratha market already. Probably don't need anymore in the region. In Karratha the first condition has been met - there is plenty of land supply. But overall build costs are still expensive so that will limit the downside for now. Still, government has been dead-set on reducing rents in all these communities by a raft of measures to increase housing supply. Hopefully with the Nationals no longer having the balance of power some of that pressure will come off...
Hi Sanj
no not in regional, however this is what is happening in US at the moment, rents have dropped off and tenants are breaking leases and renting cheaper down the road
Back to topic, I have heard and know of a couple of companies that did break their leases, for whatever reason, however they continue to pay the lease till it expires as it is chicken feed.
That's the price support up there.
It will cost at least $750 to $850K to build a good quality 4x2 demanded by people living up there.
Thanks for the advice guys. I also feel there is a bit of a floor in terms of how low prices would go if there is a bit of a slowdown but if things completely collapse of course the replacement cost would be irrelevant.
With your Karratha investments - have you found that the older homes on large blocks with sheds etc have held values better? My thinking is that they would not be as saturated as the new TR Homes style product in new estates of which there would be many on the market during a downturn.
With your Karratha investments - have you found that the older homes on large blocks with sheds etc have held values better? My thinking is that they would not be as saturated as the new TR Homes style product in new estates of which there would be many on the market during a downturn.
I am no expert and only just starting to get into the game so cant offer any kind of advice like the above posts but i can tell you that there is alot of accommodation planned for Onslow.
I live and work in Karratha and our company has quoted on the concrete works for a number of accommodation style developments and multi unit developments in the town. notable ones being
- stage 1 of a multi storey modulated development that will eventually consist of 580 single mens quarters style rooms that is not associated with Chevrons accommodation projects
- stage 1 of a development that will eventually be some commercial space along the street front with approx 42 2x2 and 3x2 town house behind
- 22 3x2 townhouses
- and a few other smaller town house developments
There would be enough accommodation for say roughly 800+ people. Chevron is building a 5000 man temporary accommodation camp and a 350 man permanent accommodation camp that will be like a resort that will house the expected 350 man workforce to run the plant after completion.
Hope that helps
I live and work in Karratha and our company has quoted on the concrete works for a number of accommodation style developments and multi unit developments in the town. notable ones being
- stage 1 of a multi storey modulated development that will eventually consist of 580 single mens quarters style rooms that is not associated with Chevrons accommodation projects
- stage 1 of a development that will eventually be some commercial space along the street front with approx 42 2x2 and 3x2 town house behind
- 22 3x2 townhouses
- and a few other smaller town house developments
There would be enough accommodation for say roughly 800+ people. Chevron is building a 5000 man temporary accommodation camp and a 350 man permanent accommodation camp that will be like a resort that will house the expected 350 man workforce to run the plant after completion.
Hope that helps
I can't say where I work, but I am in the area. The pub is long gone, thats sold to a big big company. They're trying to get a stranglehold on the liquor license. The (wheatstone) camp is the main priority to be completed, and they are pushing as fast as they can, to pull people out of town.
Macedon is winding down too, they are now onto the commissioning stage. In all honesty, I think onslows had its run. But then again you never know, the tenders out out for demolition of the burnt down council headquarters, but it could be a few years till its completed. They mentioned on the ABC today they want to expand with more shops in the town center.
Regards.
Onslow is a major danger zone for investing ive been working on the gorgon project for near on 3 years and everyone knows the camp will hold all employees and they are restricted from leaving the boundries of the camp after wheatstone onslow doesnt amount to much. i noticed some good deals 2 years ago 5x2 for 700k on a massive block coulda shoulda woulda.
Regards R
Regards R
I believe there are already Chevron employees in Onslow, from what i know the camp is for Bechtel employees/contractors and not Chevron.
"This week,John Holland announced it had secured a key contract with Bechtel Australia Pty Ltd to design and construct the accommodation village for Chevron’s Wheatstone gas project near Onslow on Western Australia’s Pilbara coast.
With a contract value of approximately $370 million, the 3,800-bed village is one of the first major contracts to be awarded for Wheatstone. Work on the village will begin immediately and is due for completion in the second quarter of 2014."
.
ABC News on Onslow.
.
http://www.abc.net.au/news/2013-03-...in-as-onslow-expands/4600886?section=business
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ABC News on Onslow.
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http://www.abc.net.au/news/2013-03-...in-as-onslow-expands/4600886?section=business
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Scary stuff.
Onslow is truly a one industry town (just gas, nothing else and just one main street to the end of town), unlike Karratha and Hedland having many industries and being regional centres and getting lots of government infrastructure money spent and Newman being a central hub for major mines in the region.
Dunno, the risks in Onslow are much higher than other towns and I'd put them even higher than places than Gladstone and Moranbah.
Also, just on Gladstone and Moranbah there's a Hedland "real estate" company now pushing these towns as part of their cash-flow strategy. That is just crazy scary, given the downturn in those towns.
But, hey, when risks are high, so are rewards but so can be the pain.
