Rocky - Suprised at ongoing strength

[see_change]

Suprised at ongoing strength

Rang up an agent I know to find out what was happening up in rocky at the moment , and he expressed amazement at the ongoing strength in the market up there.

He said that it is now cheaper to buy a house on the gold coast than in Rocky. ( that maybe an exaggeration , but then again , who knows any agents who do that ... )

A basic three Bedder Fibro we were told ( at the time ) would have been lucky to get 125 at the beginning of last year would now sell for 170 . Paid 87.5 just before the start of this thread. A similar one sold recently for 5 K above asking price of 165......

I'd have a guess that rocky is now in a phase of irrational exuberance...Maybe a good time to revalue ( though those may not coming it current selling prices ).

See Change

 

[willair]

He said that it is now cheaper to buy a house on the gold coast than in Rocky. [/quote]
See Change it will be interesting to see what happens in Rockhamption
over the next 2 years, it may even catch up to Mackay which now in
some areas would be as expensive as the Gold Coast. I guess all
the money from the Bowen Coal Basin has to spent somewhere
Mackay i'm told from my bricklayer mate has gone up 30% in
the past year in the south mackay and eimeo suburbs the he invest
in,and the difference in median price would be in the 125 k range
compared to Rocky.
good luck
willair.

 

[Sultan of Swing]

We have the same sort of thing happening here on the NW Coast of Tassie.

We've been telling people it's plateaued but when we look back over the last year prices seem to have risen 20 - 30 % in the lower end.

At the peak of the boom I sold a particular house for 125k. I resold it 2 weeks ago for 165k. Also, a number of new listings have been selling within days of being listed, and some at what we 'experts' consider at ridiculous prices. Another we listed late last week we're getting multiple offers on already.

Anything under 200k is getting snapped up.

Anything realistically priced in the top end (read 250 - 400k) is also going reasonably quickly, and without having to drop price much either, if at all.

Cheers

 

[markpatric]

I am very surprised at what has happened in Rocky and in fact all regional areas.
I shouldn`t be.

 

[thefirstbruce]

Had a look around Rocky when up there in October last year. Would be reticent to buy there. Booms very much are pyramid schemes where the last guys in make the least or lose.

Rocky is definitely a hub for much of the service industry for the coal mines, but I don't see that much more growth potential, for coal mines or the service industry. It's a hot and dry place too, and more and more people are moving down to Yeppoon. The peak hour commute from Yeppoon to Rocky is pretty busy. I wasn't that keen on Yeppoon either. Would rather stick to the Sunshine Coast where your median 45 year old miner will be retiring to in the next 10-15 years. The mines are relying more these days on contractors rather then employing full time.

But then again, heard of a guy who just took 2x$400k+ losses on two canal front houses he bought at Minyama 2 years ago. Just goes to show you should never need to sell. Though this guy wouldn't have unless he had a better use for the money.

 

[tropic]

I am surprised with how much they appreciate in values. My bank manager told me that I can borrow to buy a couple IPs $400K each but I am just to scared to do it. But I can hardly call myself a successful property investor either as I only have 1 IP.
I wonder how much more they can go up and they cost so much to run because the yield is quite low. But then again I also said that 12 months ago. What do I know.

 

[Panda]

Yeah I have been watching Rocky as I have property up there. I think Rocky has been undervalued for quite a while and its seemed that it was slow for the recent boom to catch on.

Ofcourse it will come to an end but I dont think prices will drop back very much from where they are.
the main reasons are,
- Yields have been strongly on the increase which will put a floor on how far prices can drop back. This is another reason I think that the market has not slowed down too much.
Proof of that is a property that I bought about 2 years ago up there. It was renting at 80pw although was worth 120. Its now at 200pw (with some reno's having been done). This sort of return allows prices to be higher because you can still get a good yield at the higher price.

Infact the yield on this property has remained the same when calculating yield based on current value. So the property has gone up and the yield has remained the same, which is great! Normally as a house rises the yield (if calculated on value) will fall since rent stays the same.
- The other reason is that its been undervalued for some time. If you compare what Rocky offers (infrastructure, vacancy rates etc) with other similar towns then Rocky seems like good value.

Ofcourse its easy to see all that in hindsight but they are the reasons that I have come to. Would be interested in anyones comments on that agree or disagree.

Cheers,
Panda

 

[Roger]

According to my Real Estate agent house prices in Mackay are still going up. 2.5 years ago I bought a four bedroom property in Mackay for $202,000, renting for $215.

Last Year it was valued at $290,000 renting for $280.

Last week got another valuation, it is now $380,000, renting at $310. The agent said the rent will go up next time the lease is up for renewal.

Now the question is how long this will go on??

 

[Panda]

Wow thats great Roger congrats

I don’t know a huge deal about Mackay but while thinking about how far Rocky is going to go I think its worth asking the question what is different or similar about Rocky and Mackay.

I often here agents comparing them, I know they are similar in many respects. I also know that allot of locals have connections with Mackay, for example their brother lives there or they used to or are going to etc.

What has allowed Mackay to continue and are those same factors present in Rocky? Is it a reasonable comparison?

WDYT?

Cheers,
Panda

 

[RichardC]

Another thing to remember about northern coastal cities is that sugar farmers are rolling in it again and property in the cities is a long time favourite investment with them.

 

[Peter Parker]

Rang up an agent I know to find out what was happening up in rocky at the moment , and he expressed amazement at the ongoing strength in the market up there.

It seems a similar story in Geraldton, with asking prices now not dissimilar to cheap suburbs in Melbourne.

Or maybe it's just vendors getting greedy and sale prices are much lower???

Monitoring the difference between vendor initial asking prices and actual sale price over a cycle period would be an interesting exercise. I suspect the difference would be greatest towards the end of a boom and least towards the end of a slump (ie the best time to buy) so it could be a good test of market sentiment.

Peter

 

[flatout]

Wow thats great Roger congrats

I don’t know a huge deal about Mackay but while thinking about how far Rocky is going to go I think its worth asking the question what is different or similar about Rocky and Mackay.

I often here agents comparing them, I know they are similar in many respects. I also know that allot of locals have connections with Mackay, for example their brother lives there or they used to or are going to etc.

What has allowed Mackay to continue and are those same factors present in Rocky? Is it a reasonable comparison?

WDYT?

Cheers,
Panda

Panda,

Mackay is situated in the Pioneer Valley, a delightful strip of land sandwiched between a lovely bit of coastline (southern extremity of the Whitsundays) and a particularly nice stretch of the Great Dividing Range with lush rainforests, Eungella NP and diary growing region. It is very much a lifestyle destination attracting hourdes of tourists and new residents every year. Rocky on the other hand is built away from the coast in the heart of cattle country and as said in a previous post is hot and dry, doesn't get the sea breezes. Although those who live there generally love it, it doesn't have the same aesthetic/lifestyle appeal as Mackay. Mackay has a holiday feel whereas Rocky feels more like a service centre. Places like Mackay (Townsville & Cairns) are always going to be more popular with sea changers than Rocky and IMHO sea changers are prepared to pay a bit extra for the lifestyle they are chasing. Mackay is the kind of place ex-Rocky's will retire to once work is no longer their top priority. Then again maybe I'm biased since I grew up near Mackay

Flatout