Surat Basin region

Just reading the latest copy of YIP magazine and interesting to read about townships in the Surat Basin region in Qld are expected to take off with the various LNG projects happening in the region.

Is anyone currently investing in that region and which townships are expected to do well ? In the article there are mentions for Chinchilla, Wandoan and Miles to do well over the coming years.

Low buy in point, very good rental yield and an expected population growth in these area's are points made from the research i've done so far.
 
I'm going to purchase a property in Chinchilla. A mate of mine is going to buy 2. They will all be cash flow positive. There was a big announcement in the Brisbane Courier Mail on Thursday 25/3 about a $60 billion contract involving China.

I recently visited Chinchilla and am very impressed with all the development going on. The 3 main resources in the Surat Basin are electricity production, coal export and LNG gas. There are estimated reserves which should last at least 30 years.
 
I'm going to purchase a property in Chinchilla. A mate of mine is going to buy 2. They will all be cash flow positive. There was a big announcement in the Brisbane Courier Mail on Thursday 25/3 about a $60 billion contract involving China.

Nth Bris,

I didn't see the newspaper article, but that $60B is in the Bowen Basin isn't it, not the Surat.

F
 
thanks for the comments and i'll look into that area further... Looks quite promising from the research i've done to date.
 
Hey guys,

I too am currently looking at the prospect of investing in residential property in the Chinchilla region. Primarily due to the upcoming projects (QGC, BOC $100mil Coal Seam to LNG) which have potential to increase the need for rental housing.

In Particular I'm looking at home and land packages in Sovereign Park & Bottle Tree Estate.

Being relatively new to the real estate game I was just wanting some general advise on what to look for when targeting people moving to the area for work. Keeping in mind that I am living in Sydney and will have a real estate agent in Chinchilla managing the property.

Let me know what you think!
Cheers Tim.
 
Hey Tim,

I'm like you an investor from Sydney so what i'd be doing is talking to some local agents in the area to get a feel for the kind of people moving into the area, as what I can gather there are majority young families who are living in 3 and 4 bedroom houses.

I also think with area's like this that are set to boom due to it's resources on offer is to also wise to have an exit strategy in place so you have an idea of when to sell once the majority of money to be made from property in the area subsides.

Good luck with your IP plans in Chinchella
 
hmm had a look at chinchilla looks like the ships already sailed

seems overpriced and full of speculators some established mining towns are cheaper then here:confused:
 
I wouldn't say "the ship's already sailed", even though the projects look like going ahead, the big ones are still to make their Final Investment Decisions ( FIDs ) later this year. Some may not get off the ground and some may merge. But there is no doubt that this region will have a huge input of investment over the next few years. Once the projects do start and the demand for housing increases, I'm hoping the supply won't be able to cope (a classic supply and demand scenario).

We have bought 2 H&L packages in Dalby. We chose Dalby b/c it's the biggest town already, it's the closest to Brisbane, it has land supply issues due to some areas being prone to flooding and it feels like a nice place to live. Also, the banks are happy to lend 80% in Dalby but if you go too far out they treat some areas as remote and funding can be harder; You'll have to check. Both are in new estates b/c we thought the landscaping, new streets, new houses, underground powerlines etc, would add some value. Also, we will be aiming at the corporate rentals so the places with the best features and quality should attract the highest rents. We went for 4brm, 2 living areas, and ducted air as it gets pretty hot out there.

Anyway, hope it works, the contracts are signed now so we'll see!!!

Good luck and keep us informed if you make a decision.
 
Shemp, good idea to go with Dalby. Talk now is that all energy operations headquarters will be based out of Dalby rather than Chinchilla/Toowoomba.

Which estates did you buy in? What is your expected rent on the new houses once complete?

I'm just running through a few ideas at the moment. We have 2 older properties in Dalby and I'm currently completing a subdivision on one of the larger blocks. Just working out whether to go new exec house or move an older house onto the block. Seem to be a lot of stock available with house removal companies currently.
 
Icarus,

Good to hear the plan for energy ops headquarters. I hadn't heard that.

We bought one in Lone Pine and one in Kingston Park. Both were thru Blue Horizons ( Corr Picone and Helene Thomas ). Chose them b/c of standard of houses their builder produces ( Michael Pollard Homes ). No waffle pod slabs (some builders in the area use these but with the reactive soil they could be a problem later)

There are certainly lots (200+) houses up for sale on RE.com and quite a few in Lone Pine. Maybe people who are trying to make a quick buck on the resale but the demand doesn't seem to be there yet. It prob won't be until next year that the jobs pick up and the rent and prices go up too.

We were quoted $510 pw rent for a 4bed 2bath 2living areas with floor area in excess of 220m2 with air, DLUG, etc. Whether we get that with all that stock on the market is doubtful, have to wait and see.

The block at Kingston Park is not even registered yet so it won't be built until late 10 or early 11. Suits us. I can't do 2 things at once!

We thought of a reno but not living there I wouldn't be able to spend much time overseeing the project.

I think the better equipped homes will get the better rent and will (hopefully) be the first ones the corporates look at when setting up accom for the execs.

Not sure, bit out of my comfort zone with these as I am a beginner.

Cheers,
 
I'd imagine that $510 wouldn't be too far out of an estimate when things start ramping up a little more. Do you mind if I ask what you paid for the houses? And how did you find dealing with Blue Horizons?

I agree about not using slabs for construction in the area, both of our houses are on adjustable stumps. After seeing the cracks in the blacksoil in the backyard at one of our places before the rain came earlier in the year - I can only imagine how this would effect a slab!

I'm pretty lucky with my holidays so we've (builder mate, GF and I) spent a week or two over the Christmas holidays for the past couple of years doing work on the houses to get them up to scratch. Rent is still a bit slow though.

I saw that you were based in Brissie as well. Do you go to the BIG meetings at all? I've only just started going and have really been enjoying the speakers so far. There should be one on again next Tuesday, so if you're heading there I'll catch up with you for a chat then.

Found out about the operations HQ from an mate involved in shopping centre developments. They did the one beside Myall Ck and have the option to build the 2nd one that's been proposed for the town.
 
Icarus,

the house at Lone Pine is actually a slab but a suspended slab with deep footings so I hope it will hold up. The other will be on piers as it will be a bigger house on the acre block.

Dealing with Blue Horizons has been a real pleasure. :) They spend lots of time and effort making sure you're happy with the deal and that you understand the whole process. They continue to be available for qs or just a chat thru the build so far, and have said they will help with the leasing process.

Both blocks were around $120K-$125K. The house we chose for Lone Pine (from a selection from the builder) will be about $250K turnkey. So not cheap. Haven't chosen a house for the other block yet.

Bank does an "as if completed" val for finance and it came in over 400 so happy with that.

Haven't been to BIG meetings but I would like to go to one. Where are the details?
 
Rental market in Dalby

I bought a house and land package in Dalby through BLue HOrizons, which was constructed a bit less than a year ago. The construction process went smoothly. THe rental market has been somewhat disappointing after all the hype etc about the Surat Basin and resource projects. At the time I bought in there was a shortage of 'executive' type homes - that was probably around Feb 2009. By the time the place was built things had gone a lot quieter. THere are a number of new houses vacant in Dalby at the moment. I was lucky to get a tenant but at $450/wk presently rather than $550-600 which previously would have been achievable. So if you are going into house & land package just be prepared for possible vacancy periods at least until things pick up - people are expecting a pickup in the mid year as construction on a power station extension commences.

cheers
 
I bought a house and land package in Dalby through BLue HOrizons, which was constructed a bit less than a year ago. The construction process went smoothly. THe rental market has been somewhat disappointing after all the hype etc about the Surat Basin and resource projects. At the time I bought in there was a shortage of 'executive' type homes - that was probably around Feb 2009. By the time the place was built things had gone a lot quieter. THere are a number of new houses vacant in Dalby at the moment. I was lucky to get a tenant but at $450/wk presently rather than $550-600 which previously would have been achievable. So if you are going into house & land package just be prepared for possible vacancy periods at least until things pick up - people are expecting a pickup in the mid year as construction on a power station extension commences.

cheers

Good input Gravos.

Things are not always so rosy as pictured on magazine covers screaming rental shortage or influx of workers into an area when a project kicks off. Need to have a minimum CRR (Cash Reserve Ratio) floating in the bank account to cover the rental shortfalls. This could arise either through over estimation of the rent or the rental period itself.

Since the last few years have always calculated & budgetted Cashflows on the basis that the vacancy factor is 10 weeks i.e. rented for 42 weeks out of 52 weeks, especially for an IP in an Infrastructure town.
 
- people are expecting a pickup in the mid year as construction on a power station extension commences.

cheers

And a new one starting to be built!!

I did a recon in Dalby before Christmas, speaking with two camps they have in the area for labour and also the real estate market.

Things were dying off a little, and the agents were reducing rents to ensure properties are tenanted. This was due to the Darling Downs Power Station construction was over the peak period and guys were finishing up.

Once projects are awarded / commenced again, I believe the demand will come back.

All in good time.

F
 
I bought a house and land package in Dalby through BLue HOrizons, which was constructed a bit less than a year ago. The construction process went smoothly. THe rental market has been somewhat disappointing after all the hype etc about the Surat Basin and resource projects. At the time I bought in there was a shortage of 'executive' type homes - that was probably around Feb 2009. By the time the place was built things had gone a lot quieter. THere are a number of new houses vacant in Dalby at the moment. I was lucky to get a tenant but at $450/wk presently rather than $550-600 which previously would have been achievable. So if you are going into house & land package just be prepared for possible vacancy periods at least until things pick up - people are expecting a pickup in the mid year as construction on a power station extension commences.

cheers

Just wonder why you want to buy Land+Home package while there are alot of existing house?
 
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