I invested up there in 2006, the property prices dropped considerably in the GFC however prices have been steadily recovering. I think the town has had a nil vacancy rate for the last three years with a huge rental waiting list. Property prices still seem to be fair for the rents they achieve. Rio Tinto has plans to do a 1.6 billon mine expansion that will extend the life of the mine by another 40 or so years, the project did run into a speed bump when Environment Minister Tony Burke had concerns about an increase in shipping activities through the Great Barrier Reef. Rio Tinto need the mine expansion to feed their two Alumina plants in Gladstone as well the ore is a better grade that requires less refining to process which would also decrease the price of manufacture and make Rio more compeditive in the struggling Aluminium industry. I think this has been sorted out now however I am eager to see the project start. I'm sure that will give the properties a boost.
Thoughts on investing in Weipa QLD?
- Thread starter Jenko
- Start date
We have two, 3x1x2 at $750 pw just signed a five year contract with yearly increase with market value and a 3x1x1 at $650 pw to Rio and they wanted a three year contract however we only went with 12 months so we could have the option to sell vacant possession. I'm very tempted to buy a unit but just not sure, having all my eggs in one basket.
I am quite worried about Aluminium as a commodity hence I personally would not invest in Weipa, although the yields look great. RTA only made ~$400m off $12b revenue, so it's a rather slim operation...
Compare that with iron ore which has a 40-50% profit margin...I think North West WA towns will weather any further slow down much better.
Compare that with iron ore which has a 40-50% profit margin...I think North West WA towns will weather any further slow down much better.
Just joking!That's good news. However I would be worried that if aluminium prices fall further, they may do a Ravensthorpe and put the lot on Care and Maintenance.
Fingers crossed that dosen't happen. Rio has already invested billions of dollars in the industry with the new Gladstone refinery Yarwun and new ships but as you say the price of Aluminum needs to strengthen. That's why I'll be happy once I see the South Embley Project go ahead. They wont spend that kind of money on a bleak future. I like to think positive.
Been a long time resident (32 years) in Weipa, worked for RTA for 25 years. Rio has to build South of Embley as North of Embley is almost the depleted. Sales are a bit stagnant at the moment ... but !!! Get in early as there is very limited land within the current town boundary left for development.
Whilst there is no hard action on SOE the planning and expressions of interest are flowing freely in the pre-construction area. Rio are currently developing two more areas for housing, Golf Links 2 and 3.
Whilst there is no hard action on SOE the planning and expressions of interest are flowing freely in the pre-construction area. Rio are currently developing two more areas for housing, Golf Links 2 and 3.
Just a update on Weipa, in Smartproperty Investment magazine, Trunding ( a suburb of Weipa) was listed in QLD UNITS Proven Performers with up 14% for 12 month growth, 56% for 3 yr and 32% 10 yr avg growth.
Rocky Point (another suburb of Weipa) was listed in QLD HOUSES Proven Performers, up 18% for 12 month growth, 69% for 3 yr and 13% 10 yr avg growth.
Rocky Point (another suburb of Weipa) was listed in QLD HOUSES Proven Performers, up 18% for 12 month growth, 69% for 3 yr and 13% 10 yr avg growth.
Sorry for dredging up an old post however i had to show off Weipa's vanacy rates. http://sqmresearch.com.au/graph_vacancy.php?postcode=4874&t=1 and still property prices are relatively low. I am so tempted to buy another property there however I don't want to put all my eggs in the one basket.
Same as me already have 2 here just cant bring myself to buy again to expensive but I feel I will eat my words soon....
We were very close in getting an IP in Weipa late last year. Then we changed our mind because
1. It would not fit into our exit strategy, ie it would take a long time to sell.
2. Aluminium is not a hot commodity atm.
3. It is surrounded by 'protective' land/reserve.
4. It's going to be very expensive to do any repairs.
Cheers.
1. It would not fit into our exit strategy, ie it would take a long time to sell.
2. Aluminium is not a hot commodity atm.
3. It is surrounded by 'protective' land/reserve.
4. It's going to be very expensive to do any repairs.
Cheers.
Hi onetwothreefour,
Some of your points you see as negative for investing in Weipa I see as poistives.
1. Aluminuim is not a hot commodity. Weipa mines Bauxite not Aluminuim.. The bauxite is not only sent to refineries in Australia but also all over the world. Weipa produced 23 million tons in 2012. "IF" the South Embley Project goes ahead this will increase to 50 million tons per year for forty years. So there is good demand for bauxite. Aluminum is suffering ATM however everything happens in a cycle and I'm sure it will recover.
2. Weipa is surrounded by protected land, most aboriginal reserve and mine lease so the is a real shortage of land. This is think is a real plus it will help drive prices up as the mining ramps up.
3. Expensive repairs.. I'm not so sure, no more then Gladstone. Freight cost can be expensive. Although there is talk of bitumen the rest of the road from Cairns to Weipa (now approximately 300 of the 900 km is bitumen) by 2020. If that happens freight should decrease you would think.
4. I'm not sure about taking a long time to sell your property?? ( How do you know that?) Price right you would sell it in a week. I have had three pretty temping offers on one of our properties in the last 12 months and it not even on the market.
Another plus is most properties are leased to Rio Tinto so rent is never late.
Announced today Weipa's new mine approval
Your first point confuses me. Buaxite ore is the main source of aluminium. How is subdued demand for aluminium not relevant to demand for bauxite?
