The future of Muswellbrook

N

newbieinvest

Things have been up and down in Muswellbrook for the last 3-5 years and to be honest if you bought 4-5 years ago your capital growth would be next to nil with the recent downturn in the market as a result of dropping coal prices and it impact on the local market.

I recently had an agent do a valuation of my property and he valued it at same price I bought it for in 2010. He told me during subsequent discussions that he doesn't expect things to pick up again for another 12-18 months.

The property is all most paying for itself so I have no cash flow problems. Currently costing me about $50/week including all expenses which is nothing. It's my one and only investment property.

My question is, should I stick around or sell and move my investment somewhere else. Problem is that I would lose money if I did that with the expenses of buying and selling. I'm in for the longer term so happy to stay if it make sense to do so.

Give me your thoughts.
 
Can you afford to buy another place if you didn't sell it?

My rule of thumb, is only sell if you have to.
 
I could but don't want to at this stage. Property is not a major interest of mine so don't want to limit cash flow at this stage. Looking to get another property in about 4-5 years.
 
If I had a place in muswellbrook I would be holding onto it.

Lots of things up in the air at the moment. I did hear some interesting things planned for next year but we will have to wait and see.

James
 
Look and see whether you can renovate or something to improve the yield, get it cash-flow positive. THEN look at selling to an investor. Those with SMSFs seem to be hankering for cheap cf+ properties that in the short term won't lose value, and will increase in the mid- to long-term. It could be argued that Muswellbrook WILL improve, just not sure when. :)
 
vaughan said:
It could be argued that Muswellbrook WILL improve, just not sure when. :)
Click to expand...

Lots of things COULD be argued. The question is on what basis? Anyone got any real info on the outlook for Australia's coal industry? Struggle street right now, but will this turnaround? If so on what basis...
 
It will turn around when demand increases.
Currently there is an oversupply of good quality coal. Mostly as a result in the boom of coal prices.

Most mines expanded production and/or open greenfield sites. This lead to an oversupply. Great news for purchasers of coal. Japan, India, China.
Bad news for Aus.

More bad news for muswellbrook with bhp cutting another 160 staff announced Thursday.

So exactly when it will pick up is hard to predict. China said awhile ago it was going to shut alot of its poor quality coal mines down. They recently started doing this with ore and saw a small jump in ore prices. So hopefully the same will happen with coal.

If Japan melts another nuclear reactor we will see another coal boom.

James
 
For every person I speak to that says "Stick around, more good days ahead" I speak to another who says "Get out while your can".

My gut tells me to keep the property and see what happens.
 
In this case especially, Muswellbrook, depends upon what price one paid to get "in" as to how long they may "stick".

Muyswellbrook is just a couple hrs out of Newcastle, about 3 from Sydney. The population is growing, it's a big enough place to survive on it's own IMO.

Just time will tell.;)
 
It's a catch 22, prices have tumbled, and every investor is trying to get out

I could get out now but I'll probably keep it, since I'm competing with everybody

Mines just recently become vacant and I'm quite scared how long is going to take to rent it out
 
Muswellbrook has been there a very long time, as we all know there has just been a boom during construction times of new mines. The same has happened throughout the world and the extra coal mines are all now competing for the market.

It will take time for unprofitable mines to be closed or mothballed and the survivors will then continue until all the coal is gone.

Muswellbrook does/did have a thriving agricultural industry to support the town but I can't see it going back to boom levels any time soon unless some catastrophic event effects coal supply throughout the world, perhaps a war ?

I suspect that Muswellbrook will stay at a bit less than the present level for quite some time, those looking for a quick buck will be disappointed and some may lower their price to better utilise their money elsewhere.

I can't see any reason for a rebound but I don't think it will crash either.
 
Macca said:
I can't see any reason for a rebound but I don't think it will crash either.
Click to expand...


Will be a bit of a flush out of the overextended investments, but, Yep, slow and steady now the rush is in the rear view.

The new projects are now moving further up the line into our area, Liverpool Plains.

Things will heat up here pretty soon.;)
 
My tennant has just asked for a rent reduction. While this won't impact me too much from a cash flow perspective it certainly adds to my disappointment in my muswellbrook property. I keep reading about real estate growth in almost every region except the upper hunter.

I'm in for the long term but starting to wonder if I'm wasting my time.:(
 
We bought there in 2010 have had 4 years of fantastic rent return. When it became vacant in May we went in updated the inside, we changed Property Managers and we met the market with price. So we were able to get a tenant took about 2 weeks . I know mining has definitely affected Muswellbrook but I believe an over supply of all the new homes has made it much worse. The developer has a lot of land still to be released which is not good news.
We always thought Muswellbrook would be a keeper just not sure now but we will see how the area develops over time with industry etc...
 
I think it better to hold on and to offload when the stock on the market reduces so you don't have so much competition

I think the damage has been done already so depending on when you bought,
 
opportunity cost

the other factor in considering to sell or not really is
"can you take this money and move it into an investment that is going to give you a better return" my opinion is that there are a lot of areas with great capital growth potential than Musselbrook. Take the pain now my guess is in 3 years time it will be no different.
 
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