Well here we're with the inevitable end to the mining boom I feel sorry for people who invested in more recent times are now caught trying to offloaded properties. Though I think there will still be pockets of boom times in the mining sector I think it will be limited and it will be hard average person without the inside knowledge to timeing right.
The Sydney market on the other hand I think will be poised to move I don't think it'll be the case with this with Melbourne and Perth which I think has had its heyday t Sydney on the other hand has been suppressed for sometime. I think that will be ready to head up steadily. I have noticed in recent months an increased interest in properties from investors and home owners alike. The great buys are getting snapped up whereas not so long ago they would sit on the market.
New South Wales something will work possibly make a move we have few properties in regional New South Wales which are buy and hold for income. I don't expect any big capital gain there but the returns are good. But Sydney for example I think we will get the best of both worlds (in the right areas).
I would be interested, does anyone else have an opinion agreeing or disagreeing???
Cheers Angus
Angus,
Happy to throw my 2c in. I would disagree however with your sentiment.
i would be interested to understand why you feel the mining boom has ended. Australia has long term contracts to deliver mining resources for a significantly long time,in excess of 20 years. these contracts are already up and running. Contrary to the Media rubbish and the mis leading statements by the press, the mining boom is not at an end. What is happening at the moment is a reduction in commodity prices on the global market and therefore companies are no longer expected to make the significant profits they thought at the beginning of the year. This means that in order to maintain high profit (as this has become the norm for mining companies in recent years), they will postpone or delay opening of new mines in areas that may have been expected to be opened.
Think of it this way - McDonalds is booming, returning excess profits because everybody is crazy about Maccas. People are getting work because Maccas is opening stores all over the country - boom boom boom. But now it turns out that eating maccas as a mainstream meal is not good for you, so people stop buying so much, the price eases a little and demand drops slightly. Maccas decides not to open a store on every corner preferring to maintain profit levels. But the interesting thing is, people will still eat maccas (not as much now), but they will still be profitable.
This is no different to the resources industry. It will still be the primary export of this country in my lifetime at least. Energy resources will dominate the geopolitcal spectrum in the coming years and Australia is well place to be in the best position to provide natural resources and energy respurces to the world.
As a Sydney resident you should be accutely aware that NSW has a major energy issue. It does not have enough Electricty and Gas supplies to support the growing NSW population. NSW of all states needs to get their act together and start to address the power/gas shortfalls currently being faced by Sydney.
Where do you think this will happen - Hunter Valley. The hunter valley will see significant infrastruture and attention by the NSW Government. Only two weeks ago there was discussions in the NSW Parliament about a better road network system in the Hunter Region.
Would I invest in boom mining towns now like Emerald, Gladstone, Dysart, Pilbara - no way. i cant afford it and it is not part of my strategy. However, would I invest in new up coming potential mining areas, hell yes. In fact, one of the reason I purchased my current sub-division site was because it had planning permission from Cortona Mines to open a gold mine in the region. I got in early and now I hope to benefit from potential growth. I believe the hunter Region provides the same opportunity.
In terms of other capital cities, all of them will have a cycle. In my opinion, all of them are approaching or have reached the bottom of their cycle. It is most definately a buyers market. I think I recall a different post where you suggest that its becoming a sellers market. Again, I would have to disagree. A sellers market would indicate fast movement of stock, houses not remaining on the market for more than a few days and Vendors over pricing and getting slight increases in market value as they (the seller) can price a little higher. I believe you would be hard pressed to find vendors out there that think they are in control of price and time of selling. I would find it more likely that most vendors, will provide significant vendor discounting to obtain an illusive sale.
I think it is still a buyers market. Why? because as a purchaser I set the offer conditions, I have time to review stock, negotiate hard for the terms I want. When I lose control of setting terms and conditions on property sales and I have to run after and really try and outbid other potential buyers, then and only then would I consider it a sellers market.
There are great deals every where at the moment, the challenge is staying true to your goals and objectives and only targetting properties that fit within your ideal property strategy.
I do agree that regional properties have some great positive cashflow property opportunities that have limited growth chance (I have three of these), and I do think you could find both growth and cashflow in the capital city areas. Whether it will be Sydney, time will tell :)
Good Luck
Dean