Wonthaggi.. is it still worth for IP

[mbella]

Just curious on what everyones thoughts are on Wonthaggi, i have read that houses were being rented for around $500pw when the desal work started, anyone know if this is still occuring as on re.com.au average is about $350pw.

Also once the completion of the desal plant will Wonthaggi still be able to obtain good growth. as i think it only gain at the moment is the desal plant creating alot of work out there.

thanks

Michael

 

[Legs]

Michael,
Bunnings just annouinced a new store there... 45000 sq feet. They dont build just anywhere. It is booming and still will. personally, down the road at Inverloch is my preferred area. Still can rent 4 bed for $400 plus.

 

[our obsession]

The averaged out 'historical' growth per annum over the decade 1994-2005 was a tad over 9.7%, utilising the total sales collected by Vic Valuer-General (into median house price change).

The decade for 1998-2009 was 13% av growth.

I don't base my investing upon those historical figures, I do lots of research into an area, lots of due diligence and good deal creating/buying, I'm investing in Bendigo and Horsham. They actually have a little less average growth, technically. I don't lose much sleep over that.

 

[JDI]

I am in two minds about this area atm. It's that old problem of not having a crystal ball.
Rentals are inflated and will be until the desal workforce starts to decrease. The question is, how much will they decrease? This summer the whole district will be completely out of control with not only the normal tourists, but also the desal renters and their friends come to stay for a few days, all along this piece of coast. All holiday rentals in Inverloch are all already fully booked out according to some agents and for those attempting to rent longer term in Inverloch it's near impossible until sometime next year.
Yet, like legs said, there is a lot more development occuring in Wonthaggi over the next few years. Bunnings, increased size of Big W, Coles and Target; and the suggestion of a KMart.
I think if you're looking for capital growth you're more likely to get it in Inverloch, if you're looking for rental returns, you're more likely to get it in Wonthaggi.

 

[our obsession]

...and just on a historical observation of vic valuer general sales stat prices for Inverloch, averaged out growth per annum for decade 1994 to 2005 was around the 13 ish%.

Averaged out growth (Inverloch) for decade of 1998 to 2009 was 13.8%.

 

[Legs]

I am in two minds about this area atm. It's that old problem of not having a crystal ball.
Rentals are inflated and will be until the desal workforce starts to decrease. The question is, how much will they decrease? This summer the whole district will be completely out of control with not only the normal tourists, but also the desal renters and their friends come to stay for a few days, all along this piece of coast. All holiday rentals in Inverloch are all already fully booked out according to some agents and for those attempting to rent longer term in Inverloch it's near impossible until sometime next year.
Yet, like legs said, there is a lot more development occuring in Wonthaggi over the next few years. Bunnings, increased size of Big W, Coles and Target; and the suggestion of a KMart.
I think if you're looking for capital growth you're more likely to get it in Inverloch, if you're looking for rental returns, you're more likely to get it in Wonthaggi.

Coles is getting a bigger brand new store, Target is getting a fully fledged Target (not a country Target as they have now) with up to 40 specialty shops around that development.
The local agents are telling lots of people not to worry too much about the rental situation as the majority of DESAL rentals went to holiday homes with owners taking a one off bonanza, not existing permanent rentals. These will turn back into holiday houses after the desal.
How true? No Idea.

 

[.toe]

The desal project has one year till completion, I presume nearly every worker who is going to work on the construction has already found housing, further rent rises are unlikely. For those who bought prior to the project with the hope of capitalising, it'll soon be the time to move on I imagine. After the project finishes, the extra housing that was put up for rent will have to find another purpose.

I believe nearly 4000 workers are required for construction but only 150 are required to operate the plant. I'd be waiting for a bargain as the construction workers move on. The current landlords will be happy selling below the peak, as they count their recent rental earnings.

 

[Legs]

The desal project has one year till completion, I presume nearly every worker who is going to work on the construction has already found housing, further rent rises are unlikely. For those who bought prior to the project with the hope of capitalising, it'll soon be the time to move on I imagine. After the project finishes, the extra housing that was put up for rent will have to find another purpose.

I believe nearly 4000 workers are required for construction but only 150 are required to operate the plant. I'd be waiting for a bargain as the construction workers move on. The current landlords will be happy selling below the peak, as they count their recent rental earnings.

There will be lucky if there is 50 running the plant.
16 operators.. 4 supervisors and then a few fitters and sparkys.
Admin, say 4 as head office is doing most of the paperwork, and that adds up to very few.

 

[Legs]

Check out these developments:



http://wonthaggiplaza.com.au/centre-plan/

http://www.wonthaggihomemakercentre.com.au/eoi/index.html

and open just recently

http://www.bunnings.com.au/stores_286_.aspx

wonthaggi's on the move

 

[BayView]

16 operators.. 4 supervisors and then a few fitters and sparkys.
Admin, say 4 as head office is doing most of the paperwork, and that adds up to very few.

Nah; ya got it all wrong;

If it's a Gubbmint operation, it'll be this:

16 at head office doing the paperwork
4 supervisors
4 operators - one on stress leave, on on maternity leave, one on long service and the other holding the shovel.

One anecdote about the Desal; one of our customers lives in Dromana, was working there and has since finished and moved on to another project.

A good number are like him - commuted there and remained at their existing residence; it's merely another job they have to travel to and were compensated nicely for the inconvenience.

I think when the site is finished a lot of folk will leave the area - lots of rental vacancies.

 

[jerky]

Thanks for the update Legs, still holding my block in Inverloch, always good to know whats happening in the neighbourhood!

 

[Legs]

Nah; ya got it all wrong;

If it's a Gubbmint operation, it'll be this:

16 at head office doing the paperwork
4 supervisors
4 operators - one on stress leave, on on maternity leave, one on long service and the other holding the shovel.

One anecdote about the Desal; one of our customers lives in Dromana, was working there and has since finished and moved on to another project.

A good number are like him - commuted there and remained at their existing residence; it's merely another job they have to travel to and were compensated nicely for the inconvenience.

I think when the site is finished a lot of folk will leave the area - lots of rental vacancies.

Nope all correct. 50 full time employees on site. I personally am involved.

 

[BayView]

Nope all correct. 50 full time employees on site. I personally am involved.

It was a joke, Legs.