South Headland or Port Headland?
- Thread starter trish266
- Start date
Id say port/south hedland is well past its best time to buy
the demand for rental accommodation has died off a lot since most of the large construction projects have finished or coming to an end, In saying that the Roy Hill project has started and will require a large workforce to complete - but at the same time there is a lot more residential construction happening up there so this might absorb any influx of workers.
I work a few hours out of hedland and every time i go in there i can't help but notice the number of homes with for sale signs out front, i don't know if its just me but it defiantly looks alarming.
check the vacancy rates, i'm not sure what they are but possibly around 5%, also yields have dropped since there peak aswell.
I guess hedland is a central hub for the pilbara region and is not as risky as some of the other mining towns but i think its good for the people that invested in it a a few years ago.
it has a very high entry cost. you say you want to construct some townhouses there? if you can afford to do that in hedland maybe you would be better off finding a development project in one of the capital cities - you can still make great returns with minimal risk. lots of people are saying brisbane is expecting growth in the coming years if your from queensland then maybe that might be an area to look into?
Sorry to sound negative on hedland, maybe with your own DD you may find some good opportunities there.
cheers
A good Friend of mine Kim, she wanted to build in South Hedland.
I told her that maybe not a good idea, things are slowing, mining has peaked etc etc
However because she is a Pilbara born & bred and enjoyed living in Hedland she built anyway.
It cost approx $700K for house and land.
Spoke with her today, the house is completed and she decided to try and rent it out......
FMG picked the house up on a 5yr Lease @ $2400 p/w.
Just a tad over 18% Gross Return.
So shall I eat my slice of Humble pie?
I told her that maybe not a good idea, things are slowing, mining has peaked etc etc
However because she is a Pilbara born & bred and enjoyed living in Hedland she built anyway.
It cost approx $700K for house and land.
Spoke with her today, the house is completed and she decided to try and rent it out......
FMG picked the house up on a 5yr Lease @ $2400 p/w.
Just a tad over 18% Gross Return.
So shall I eat my slice of Humble pie?
I notice a lot of land release happening in south hedland, theres a supply coming to a market with decreasing demand.
The numbers sound good there but personally i can't see any reason for growth happening in this area let alone sustainability of the current prices.
The only reason i would consider investing in this area is if it made up a low percentage of my total portfolio value, where i could afford to handle the risk of mining towns in chase for that nice yield.
Unfortunately the boat has sailed, if you purchased 3-4 years ago then you would be in a great position to hold and even with rents falling back you purchased at the right price.
At the moment there is too much stock on the market which means the prices may drop further as well as rents. Banks also recognise this and it has become more difficult to finance in these area.
At the moment there is too much stock on the market which means the prices may drop further as well as rents. Banks also recognise this and it has become more difficult to finance in these area.
The boat has well and truly sailed.
I spent time in Port Hedland in 2003-2005. Back in 03 there were a few low-end gems to be had. But that has all dried up. Anyone buying high yielding properties in the area these days is buying into a mirage.
Port Hedland today is like Houston in 1980. A commodities town, well and truly overpriced. There's a vale of tears to those foolhardy enough to pay top dollar for properties that can only head South in value.
I spent time in Port Hedland in 2003-2005. Back in 03 there were a few low-end gems to be had. But that has all dried up. Anyone buying high yielding properties in the area these days is buying into a mirage.
Port Hedland today is like Houston in 1980. A commodities town, well and truly overpriced. There's a vale of tears to those foolhardy enough to pay top dollar for properties that can only head South in value.
18% on developed stock sounds about right, otherwise you may as well go on to the market and purchase at 10-12%
Hi Wirra436
Would you happen to know how your friend secured that lease? Ie through an agent or privately?
It would be very interesting as I've spoken to agents about long leases but they don't seem very interested in getting them - (maybe because shorter leases mean more leasing fees..)
Regards
Would you happen to know how your friend secured that lease? Ie through an agent or privately?
It would be very interesting as I've spoken to agents about long leases but they don't seem very interested in getting them - (maybe because shorter leases mean more leasing fees..)
Regards
Kim's Reply:
Through word of mouth just from living in this town.
I knew it was a gamble worth taking. BHP somehow swoop in and buy everything in town and the smaller companies get the left overs or old houses in the dodgey areas.
All I did was mention that I was building a house in conversation one night at dinner and my friends house and her mum who works for FMG said call me when its nearly done.
I also had a few other smaller companies call me wanting to make deals with me. Everyone wants a brand new 4 bedroom house in a new safe area of south Hedland.
Even though the mining companies were letting staff go because of the fall in mining there is so much happening in town that things will pick up again soon and they want to make sure they have some houses for when they hire new staff.
So my lease has started and there isn't even anyone living in my house yet, they just didn't want to miss out on it.
There you have it.
Thanks for your reply Wirra436. I thought something like that must have happened.
Your friend Kim has done very well I think.
Regards
Your friend Kim has done very well I think.
Regards
Interesting anecdote, but not in keeping with current reality up here.
If you look at this picture I took a few weeks back, you can see there's a lot of land about to be released - top right, bottom left, for example.
The buying market dried right up about a year ago. It's driven by out of town investors, and no one is purchasing right now (check the Pilbara Development Commision stats for actual sales).
I'm about to get to the end of a five year lease with a government department on a house in Karratha. It's been a sweet run, but I'm not sure if they'll renew - and if they do it'll be at 60% of what I'm currently getting (yes, rents have dropped 40% in the past year - $2000/week to $1200/week).
Karratha and Port Hedland are not true mining towns - they're populated moreso by people in the service industries related to mining. So they're diverse enough that they're not just going to disappear.
Having said that, I think to get the real boom times rents/sale prices you need lots of construction going on, and that's not likely to happen in either of these towns given the large-scale unwinding of resources construction jobs predicted in Australia over the next 4 years or so.
So if you're going to develop a property in South Hedland right now, my take is that you'll be getting to market in a time of increasing (over)supply and faltering demand. Is the return worth it? Maybe, but certainly don't plan on getting the 2012/early 2013 returns that we've all been enjoying.
Cheers,
Rob
(ex-Melbourne but a Pilbarian since '03)
If you look at this picture I took a few weeks back, you can see there's a lot of land about to be released - top right, bottom left, for example.
The buying market dried right up about a year ago. It's driven by out of town investors, and no one is purchasing right now (check the Pilbara Development Commision stats for actual sales).
I'm about to get to the end of a five year lease with a government department on a house in Karratha. It's been a sweet run, but I'm not sure if they'll renew - and if they do it'll be at 60% of what I'm currently getting (yes, rents have dropped 40% in the past year - $2000/week to $1200/week).
Karratha and Port Hedland are not true mining towns - they're populated moreso by people in the service industries related to mining. So they're diverse enough that they're not just going to disappear.
Having said that, I think to get the real boom times rents/sale prices you need lots of construction going on, and that's not likely to happen in either of these towns given the large-scale unwinding of resources construction jobs predicted in Australia over the next 4 years or so.
So if you're going to develop a property in South Hedland right now, my take is that you'll be getting to market in a time of increasing (over)supply and faltering demand. Is the return worth it? Maybe, but certainly don't plan on getting the 2012/early 2013 returns that we've all been enjoying.
Cheers,
Rob
(ex-Melbourne but a Pilbarian since '03)
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Is there such a place in South Hedland ? ? ?
I have just moved back to NSW from south hedland lived there for 2 years.
there is alot of new developments happening and the rental market has dropped off heaps.
i feel if the outer harbour expansion happens that will give hedland another big boost but who knows when that will happen it could be 10years away!
i have a mate there that has just built 4 units and he is still in a comfortable position but if he had these units done 5 years ago he would of been alot better off.
there is alot of new developments happening and the rental market has dropped off heaps.
i feel if the outer harbour expansion happens that will give hedland another big boost but who knows when that will happen it could be 10years away!
i have a mate there that has just built 4 units and he is still in a comfortable position but if he had these units done 5 years ago he would of been alot better off.
how do you pull out of a build contract?
Talking to someone in the known working for Fluor the other night.
Seems BHP will shortly pull the trigger on a number of projects.
Appears they don't want to lose out in the IO ******* contest with Gina and Twiggy.
Will be interesting to see what that might do.
But yes, rents are down.
Currently renting properties for 40% less than the peak.
Seems BHP will shortly pull the trigger on a number of projects.
Appears they don't want to lose out in the IO ******* contest with Gina and Twiggy.
Will be interesting to see what that might do.
But yes, rents are down.
Currently renting properties for 40% less than the peak.
the amount of units that are being thrown up here is crazy. and alot (100ish) houses just nearing completion near the tip. lots and lots of houses/units going up. rental prices are coming down (even some company subsidies are getting reduced)
also look up landcorps plan for port hedland. lots of land to be developed.
also look up landcorps plan for port hedland. lots of land to be developed.
Ouch
That would hurt
Hubby is in IO and said that FMG have camps in town such as Club Hamilton, Woodside have Camps in Karratha such as Gap Ridge and that is just a few
