whyalla

[BMan]

i remembered reading about whyalla and that a mining boom was just starting...
i cant find the thread now though

whats everyones thoughts on that?
my MB has suggested that as a place i might like to invest
apparently they are building 3 bedroom 3 bathroom houses OTP for about 340 - 370 with a min of $600 a week guarantee for 3-5 years

is that good return for the high risk?
would it be worth owning for a few years hopefully getting some good yield and CG and then sell it off?

 

[Tony3008]

Terry Ryder had Whyalla as one of his top picks a year or so ago when he held an evening presentation here in Melbourne, but since then OneSteel has shed jobs. Careful research required!

 

[RumpledElf]

Lots of house for sale in Whyalla in the $90k-140k range, go buy a dozen

 

[Jaggannath]

http://finance.ninemsn.com.au/newsbusiness/aap/8394382/new-sa-mine-given-government-approval Maybe buy in Kimba instead

 

[Bird Dog]

or this..

http://www.somersoft.com/forums/showthread.php?t=75761

 

[BMan]

thanks that was the thread i had seen

i wasnt too sure it was a good idea since the rent was guaranteed probably means the house is overvalued
and the yield isnt that great for the high risk

thanks

seems strange my MB offered me that...?

 

[lizzie]

seems strange my MB offered me that...?

If he is offering OTP then I would suspect some kickback - or maybe he's bought there himself and genuinely thinks it's a good investment.

With a massive loss making steel mill and around 30% welfare I'd give it a miss myself - although they are opening up a couple of new mines near there. Perhaps the towns closer to the mines themselves might be the answer.

 

[BMan]

im not looking for high risk for my first IP so dont think i will be going down that path

thanks

 

[RumpledElf]

Perhaps the towns closer to the mines themselves might be the answer.

I'd say no. The towns on the Eyre Peninsula near the mines tend to be extremely small (some < 100 people), no services etc. People want to live where there's stuff like, oh, internet, schools and mains water. Ie, Whyalla. It is really, really hot and dry out that way.

 

[lizzie]

each to their own - but I'd rather invest in a less risky area.

Somewhere with a bigger pool of tenants, buy a stock standard rental (nothing flash) at average for the area and no insecurity regarding the future of the area.

 

[BMan]

i know its high risk but as it was offered to me i thought id suss it out
its not something i would go for normally
and also would want more yield for that risk

 

[sanjayag]

Nobody pays $600 pw here in Whyalla. Rare exception might be a big house fully furnished and leased to some company. On the other hand, there is a big confusion here about effect of mining boom on Whyalla. As of now, there is no significant job cuts in steel company and the management is not proposing any serious job cuts in near future. And Lizzie, there is no town near the new mines except Whyalla and Port Augusta. By saying this, I'm not suggesting to invest in Whyalla on the basis of abnormally high rental promise.

 

[JT7]

Hi BMan,

I've had a close look at Whyalla as one of many places I'd consider purchasing. IMHO I'd stay away from those OTP packages being spruiked about in Whyalla. I wasn't convinced when completing my research there was a market for it just yet as sanjayag has confirmed and there is always a premium to be paid on this type of product. If you are looking for those higher returns on investment I'd suggest having a look at those regional hubs in the Bowen Basin such as Emerald or perhaps Mackay. Emerald is a strong regional centre and I've experienced great gains in both capital growth and rental yield over the short 20 months I've held my property there and with some huge investment in the area coming on line I think it is going to be a secure investment.

I'd agree with lizzie, if you are happy to invest in Whyalla, target the lower end type of market with the biggest rental pool. When I was carrying out my DD I thought there were some good deals to be had in Whyalla Sturt. I was finding yields easily over 7% which is good buying IMO.

Good luck mate,

Jack

 

[sanjayag]

Hi BMan,

I'd agree with lizzie, if you are happy to invest in Whyalla, target the lower end type of market with the biggest rental pool. When I was carrying out my DD I thought there were some good deals to be had in Whyalla Sturt. I was finding yields easily over 7% which is good buying IMO.

Good luck mate,

Jack

JT,
Whyalla Stuart is a generally a 'no go' zone if you want to gain some CG in future. I mean socioeconomic, drugs and small crimes point of view. The house prices are very low as nobody wants to buy there. Lot of new people give high rent because they don't know about the area at the time of lease signing....but soon they want to move away.
7% yields are available in good areas like Whyalla Norrie and Whyalla Jenkins too.

 

[knightm]

IF the olympic expansion ends up as big as its supposed to, and a desal ends up down Whyalla way (I know that was one proposal but unsure what the latest is) and IF a more general mining expansion commences in the area that would seem to me to be a signal for a renaisance for a town like this, and at least a few yrs of good cg. The question is when is the tipping point, you don't want to be in too early, might sit through a lot of quiet yrs waiting.

 

[JT7]

JT,
Whyalla Stuart is a generally a 'no go' zone if you want to gain some CG in future. I mean socioeconomic, drugs and small crimes point of view. The house prices are very low as nobody wants to buy there. Lot of new people give high rent because they don't know about the area at the time of lease signing....but soon they want to move away.
7% yields are available in good areas like Whyalla Norrie and Whyalla Jenkins too.

Well that's important information to take into consideration Sanjayag. My DD didn't get to the 'on the ground' stage as I ended up looking and purchasing somewhere else at the time.

I'm just not convinced enough about the underlying fundamentals just yet to put my money in Whyalla. Nothing against Whyalla itself but more to do with timing. IMHO I think regional Queensland is the place to be at the moment then perhaps reconsider Whyalla down the track but then again...I could be wrong

JT

 

[lizzie]

only have to look at what is currently for rental:

http://www.realestate.com.au/rent/in-whyalla,+sa+5600/list-1

60+ avail for rent. Many sub-$200. Most expensive, fully furnished, around $450. Chances of getting $600?

And where there are near 300 houses for sale - in a town that size - 50 sub $200k ...

http://www.realestate.com.au/buy/in-whyalla,+sa+5600/list-1

and 100 blocks of vacant subdivided land - no wonder they are trying to shift the OTP-ers

http://www.realestate.com.au/buy/pr...ist-1?activeSort=price-asc&source=refinements

 

[knightm]

yep its not ripe yet.

 

[sanjayag]

Everybody in Whyalla is looking forward to see the kick-off for new projects around. Desal plant, Ara-fura plant, Explosive manufacturing plant, new port, uranium and few new iron ore mines very near to Whyalla are the main ones.
Obviously, things are not moving very fast and we are still far away. The downside of Whyalla are:
1. Very hot and dry (no greenary, only bush)
2. Adelaide is long 400km away
3. Torn image because of red dust problem in the past
4. Roads are not in good condition in few areas

Good are:
1. Population is steady (or slightly growing)
2. New infrastructure like bunnings, big library, expansion of shopping center, beautification of foreshore, k-mart etc happening
3. Very little crime

I don't know the definition of "ripe" in terms of purchase......what is it?

 

[knightm]

Everybody in Whyalla is looking forward to see the kick-off for new projects around. Desal plant, Ara-fura plant, Explosive manufacturing plant, new port, uranium and few new iron ore mines very near to Whyalla are the main ones.
Obviously, things are not moving very fast and we are still far away. The downside of Whyalla are:
1. Very hot and dry (no greenary, only bush)
2. Adelaide is long 400km away
3. Torn image because of red dust problem in the past
4. Roads are not in good condition in few areas

Good are:
1. Population is steady (or slightly growing)
2. New infrastructure like bunnings, big library, expansion of shopping center, beautification of foreshore, k-mart etc happening
3. Very little crime

I don't know the definition of "ripe" in terms of purchase......what is it?

The above is all useful in pre purchase considerations if you are choosing between this and another area.
BTW when did the bunnings go in? is it big? following them is a good idea becuase they do a lot of market research and they spark renos and spontaneous front yard improvement mania not really but you know what i mean.

As to what "ripe" means, its a highly technical term that I coined to make myself feel more intelligent. Basiscally for me ripe is all the factors like those being discussed are in place for as close to garaunteed population and employment growth which usually lead to a shortage of housing stock at a certain price which leads to rapid cg in an isolated area which leads to relatively rapid short bursts of capital and rental price growth.

If I were to mix metaphores of the above tells me whyalla is imho brewing but not ripe, if you want to get in early and sit for a few yrs there is nothing wrong with that but keep watching the indicators and when several of the projects get underway, rental vacancies will hit 0%, all those cheapies go under contract very quickly and thats the time to be in the market (just before actually, but its hard to time perfectly, hence this thread!)