Gladstone QLD - How is it Going????

Speedracer said:
NRAS plus a land and build package is very attractive from a cash flow perspective. At a NRAS discounted rent of $400 in the estate we would have a positive return of $180 per week at a purchase price of $460,000. Estimating a 6% annual growth over the next decade.

NRAS should act as a safety barrier to some of the risks related to the rental market and although sentiment for Gladstone is negative at the moment I don't see people doubting the long term growth of the area over 10 years.

My concerns are the size of the block which is compensated by some extent by building a double story house. However i do lack knowledge in the desirability of the southern end of Tannum Sands. And am cautious that of the neighbouring 'the Sands' development has larger more expensive blocks.

It all looks good on paper, however this is my first investment and know that I lack a lot of practical knowledge.
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I don't have property in Gladstone but I do know that it is important to get the first IP right. I would be looking for a slow and steady return with very little risk if it was my first.

I think their are far more safer options available to you elsewhere than a mining boom town in decline.
 
Gladstone property positioned to crash, says Sunrise pundit
IT'S bust time for Gladstone - or so property expert Louis Christopher is predicting.

The SQM Research managing director spoke on Channel 7's Sunrise on Monday morning with David Koch, saying that Gladstone was experiencing rental falls of 30% and high vacancy rates.

While he said early in the segment that every downturn came to an end, Gladstone was positioned to crash - with negative expectations for the year.

And looking at present vacancy rates and median house prices in the region, it is undeniable that change is in the air.
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More here
http://www.gladstoneobserver.com.au/news/citys-bust-time-says-pundit/2134177/
 
Warning knell 2 years ago

Originally Posted by Rooster
Terry Ryder's view if that's your thing -

https://hotspotting.com.au/articleD...stralia-a-glimpse-of-its-economic-future-2290


Beanie Girl said:
"Residential rental vacancies are almost non-existent and rents are rising by at least $100 per week at a time". Terry Ryder 5 April 2012

Not trying to knock Gladstone, indeed if LNG demand holds up in world markets or increases exponentially, growth in Gladstone will be phenomenal. But I don't understand Terry Ryder's remark above, today I checked QLD 4680 for rentals and there are 202 properties for rent, that is not what I call 'rental vacancies almost non-existent.'

Also, Dick McIlhattan, manager of Bechtel’s LNG projects in Australia is quoted in the article as saying "If the world market holds together, there will be a lot of work for a lot of years here in Gladstone.”

What if the world markets don't 'hold together'? What happens to Gladstone then? I would be interested in anyone's opinion as to what are the threats to Gladstone's huge LNG projects.

Terry Ryder says there are seven very large projects under construction in Gladstone. Total investment is $55 billion dollars and supposed to create at least 17,000 construction jobs. One company, Bechtel, a privately family company is building 3 of the 4 LNG processing plants on Curtis Island. 6000 workers will be accommodated in worker's camps on Curtis Island.

I mean, can companies mothball construction if world markets don't 'hold together'? Besides India and China, who else are hungry consumers of our LNG gas? Japan, South Korea?

And if 6,000 of the 17,000 are going to be housed on Curtis Island and developers are rushing into building new developments and State govt is fast tracking multiple developments for 'affordable housing', won't we have a glut of housing in Gladstone in 1-2 years time or will rentals have to come down because there's just so many developments?

And all this only if the 'world markets hold together'. Not trying to spoil anyone's party but I am really interested to know what the threats are to Gladstone's LNG projects and secondly the impact of the rush to build new developments on rental prices in 1-2 years time.
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I wrote this piece on Gladstone almost 2 years ago (April 2012) in this very same thread after reading Terry Ryder's SUPER positive article on Gladstone.
I was interested in investing in Gladstone but was concerned about 2 divergent patterns I was seeing.
Companies were trying to cut their costs by housing thousands of workers in 'housing camps' (cheaper) but 'developers were rushing into building new developments and State govt were fast tracking multiple developments for 'affordable housing'

Also there was the threat of 'world markets not holding together' and companies mothballing projects.
I wanted to know the double impact of companies mothballing projects + the rush to build new developments on rental prices in 1-2 years time. Would that lead to a glut of housing, I wondered aloud.:confused:

I guess we know some of the answers now. The world markets have held together (only just) but a slowdown in China's demand has put the brakes on Gladstone projects. The shelving/mothballing of mammoth LNG projects combined with the stampede to build new developments both from private sector as well as State govt has impacted rental prices for the immediate future.

A major question on my mind is why are companies so skitterish now?
They were so willing to invest a total of 80 billion 2 years ago.
What has changed besides China's slowdown in demand?
When will they start un-mothballing projects? What is the sign companies are watching for that will give them the impetus to start investing again?
 
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Angel said:
I agree with your validation of NRAS meaning a virtually guaranteed supply of middle-income tenants and the positive cash flow aspect. However if there are no residents in Gladstone to take up your home, then there are no residents to take up your home. There are hundreds of empty houses at Calliope and Benaraby they cant give away, there are plenty more vacant brand new homes in Vantage and Little Creek etc, all just as nice as Tannum. There is no need for the Consortium to supply any more houses.

You see, as soon as your house is offered up for approved tenants at $400 a week, the other houses in the estate will also drop to $400 a week and yours will legally have to drop to $320 etc.

Is the marketing company offering you current stock at super discounted prices? What if the marketing company takes your deposit then the developer or builder goes broke? Have you been to Gladstone recently? How do you propose a 6% annual growth over the next ten years when the newspaper tells us that several of the proposed new developments at Gladstone will not go ahead?

Please look into NRAS somewhere else.
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This thread has been a big help and I appreciate all the view points. It is clear Gladstone will have challenges while the market comes to terms with it's oversupply of housing among other things.

We will pass on the land and house package.

If anyone is interested I summed up the reasons for the decision to the property advisor this evening:


.....After extensive research, unfortunately I will have to decline moving forward with this property.

The volume of bad news about Gladstone at present is too hard to ignore. The main issues are:

Current Market Sentiment and declining market

- Gladstone was at peak levels in 2011 and there has been a significant drop in the market during 2013, along with a very high vacancy rate. Supposedly there is "1300 homes and units currently for rent", "It will see rental yields diving well below 4%".

- "median property price for Gladstone has clearly dropped during 2013. Although The Gladstone areas to be worst affected include Glen Eden and the city?s CBD. And there are plenty of empty properties in areas of Calliope and Benaraby.

- On Property forums, there is deep pessimism and a little bit of fear that Gladstone isn't near the bottom of the market yet and that it will continue through 2014.

- A number of major industrial projects are at risk in Gladstone increasing the potential for instability.


Oversupply of properties
Gladstone is currently said to be oversupplied with properties and the situation is likely to worsen as all the new developments come online:

There is:

Tannum Blue: http://www.tannumblue.com.au/
The Sands: http://thesandstannum.com.au/
Riverstone Rise: http://riverstonerise.com.au/
Forest Springs: http://www.realestate.com.au/project-forest+springs-qld-gladstone+central-600000311
Vantage Estate: http://www.vantageestate.com.au/
Little Creek: http://www.littlecreekliving.com.au/location.aspx
The Rise, Settlers Gladstone: http://www.settlerslifestyle.com.au/Gladstone-159/
The Curtis - http://www.thecurtis.com.au/
Gladstone Green - http://www.gladstonegreen.com.au/


Price and Land Size

If I am a typical investor who is put off by the current market sentiment I believe there will be thousands just like me and these developments will suffer resulting in either some collapsing, big price drops or extensive delays in the developers proceeding with their next stages.

This is of particular concern with Tannum Sands. As the development in the Southern end of Tannum Sands has very little community infrastructure and further travel times. You need steady development to build the amenities.

At a total price of $460k for 320m2 i am concerned that this price does not adequately reflect the current risk Gladstone presents and is more representative of the 'boom time' prices of Gladstone.

In addition on my initial review I prefer 'The Sands' development overall community building strategy and larger block sizes that would represent a more attractive location to live in the long term.

Cash Flow

The cash flow for this property looks great with NRAS however it is clear to me that it would be preferable to look at Gladstone in a year or two when things have hopefully calmed down and may not be as risky even though this particular NRAS opportunity is missed.
 
Angel said:
Hi Beanie Girl, good question.
US Dollars is my uneducated guess
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Hi Angel, yes, you could indeed be right!
The Chinese have to buy our LNG gas in US dollars and
at the moment, with the US dollar so high, the Chinese have to exchange more yuan for 1 US dollar, discouraging them even further from buying high volumes as they did before. Their reluctance to spend more yuan coupled with the slowdown in their demand and consumption is thus a double whammy.
 
Beanie Girl said:
A major question on my mind is why are companies so skitterish now?
They were so willing to invest a total of 80 billion 2 years ago.
What has changed besides China's slowdown in demand?
When will they start un-mothballing projects? What is the sign companies are watching for that will give them the impetus to start investing again?
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Our costs (wages and construction costs) in actually bringing the finished product to market have risen to ridiculous levels (thanks to unions, greedy employees and mining companies that bent over), we are now uncompetitive with some of our competitors on a cost / production basis. A lot of the current projects are coming in at horrendous cost levels over original budgets. Others countries are also madly bringing LNG online (future supply glut) and due to their cheaper costs can sell it at lower prices. Hence projects here are mothballed. America is about to go ballistic with new LNG supply in coming years. The LNG boom and future supply / royalties everyone has been ranting about is slowly dissipating...This is the current situation WITHOUT a meaningful slow down in China's consumption. Magnify any further impact on out LNG industry by your own estimate on where China will be in coming years.
 
Gladstone is stuffed

Councils are not smart enough to deal with town planning. All they could see was the dollar signs.
Maybe they'll learn there lesson when they realise their family home is worth half of what it was 2 years ago.

Moranbah , Dysart - similar problem
You'll be able to buy houses for 100k there in another year. If coal makes a comeback could prove a good decision
Doubt you'll ever see million dollar homes in moranbah again though.... Or short memories??
 
Just had a quick flick through this thread. Lots of contributors have been talking about the imminent oversupply of properties in Gladstone for the last year or more. The worrying thought is there are still properties going up ATM although building has decreased considerably. I have two properties in Gladstone a IP and my PPOR (at Boyne). Gladstone will feel some pain for years to come and with the amount of blocks that are ready to go around town as soon as the market shows any signs of life will see new houses going up very quickly which will slow a true recovery down even more. :(
 
Gladstone will be fine, if you can hold on through the tough times, long term it will be ok...........I don't have anything to back this comment up, I'm just trying to lighten the mood on all the doom and gloom :rolleyes:
 
Robbo2621 said:
Gladstone will be fine, if you can hold on through the tough times, long term it will be ok...........I don't have anything to back this comment up, I'm just trying to lighten the mood on all the doom and gloom :rolleyes:
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Yes, it's interesting.

In the same way everybody thought the boom was going to last forever, I can't help everybody is too doom and gloomy and will also overshoot the downturn.

A look at Gladstone's history will show you the area is very voliatie. Demand for LNG will only ever grow. Given that, without much other evidence, I still see the area has potential. I have two properties there, thankfully cashflow is still good (for now).
 
charlieandkath said:
OK you Gladstone Gurus who have posted above. I have read a lot of threads re Gladstone and have come up with below 3 properties that are for sale.

What do you guys think? Any comments would be appreciated on location etc, value for money and anything else. I want to join you guys in owning something in Gladstone. Thanks in advance.

Hi Guys I bought one IP last year ,very good location ,20K cheaper then the rest of the properties advertised in the market for similar houses .My Mentor found this deal for me .it was not advertised on the net ,from there I came to know that good deals don't get advertised on the net ,its whom you know .
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Investor007 said:
charlieandkath said:
OK you Gladstone Gurus who have posted above. I have read a lot of threads re Gladstone and have come up with below 3 properties that are for sale.

What do you guys think? Any comments would be appreciated on location etc, value for money and anything else. I want to join you guys in owning something in Gladstone. Thanks in advance.

Hi Guys I bought one IP last year ,very good location ,20K cheaper then the rest of the properties advertised in the market for similar houses .My Mentor found this deal for me .it was not advertised on the net ,from there I came to know that good deals don't get advertised on the net ,its whom you know .
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DavidMc said:
Yes, it's interesting.

In the same way everybody thought the boom was going to last forever, I can't help everybody is too doom and gloomy and will also overshoot the downturn.

A look at Gladstone's history will show you the area is very voliatie. Demand for LNG will only ever grow. Given that, without much other evidence, I still see the area has potential. I have two properties there, thankfully cashflow is still good (for now).
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Yes I'm hearing you Dave.
It seems a classic case of that herd mentality, everyone is kicking gladdy while it's down, and it will probably go down further. But it won't be that way forever, and like you my cash flow is still ok. My tenants are a young local couple that don't work in the gas/mining section and have just signed on for 12 months, so I'm not too worried at this stage.
 
Yes I concur with the recent posts. Those that look for a quick buck are hurting, but Gladstone is the "powerhouse" of Qld Industry and is not going anywhere anytime soon.


It's not anywhere remotely similar to the mining only towns that are possibly doomed.


The major hubs like Gladstone, Emerald, Rocky, Mackay etc. will continue to grow over the longer term.


The smaller towns - Moranbah, Dysart etc. are in trouble as the infrastructure grows around those major hubs not the smaller towns.


Hang in there folks.
 
I agree Neil. Not only do I think it will overshoot I think it has.

There still seems to be loads of activity in the area now and in the pipeline. It may even be getting close to a good time to buy. I certain would not build a H&L package, regardless of NRAS or whatever, anyone considering to do that would be out of their mind right now. It's those houses in the newer estates that are languishing. If you really really want a new build why not buy one of the exisiting ones, you'd get a great price.

Personally I've gone for properties with great OO appeal. Inground pools, large blocks with room for 'boys toys', in the nicer older part of town where the other OO's improve their gardens and properties, wide streets. This is the type of property to go for. Mine's still renting well, houses with pools still go very quick up there, and if I ever need to sell these will be the first that do sell (regardless of the cycle).

All it takes is another major phase of construction, a new plant or the workers 'buy a local home' package offered by the big mining companies to soak up this current surplus.
 
Just got an email about some property opportunities throughout Queensland. Funny thing was one of the properties was in Gladstone. You'll be happy to know the property comes with a 12 month rental guarantee.
Description: Lifestyle: Toolooa Central is located just 5 mins from Gladstone CBD and 10 mins from the Harbour and the world class Marina. Toolooa Central offers an excellent lifestyle with all conveniences and amenities close to hand. White sandy beaches for weekend relaxation is nearby, enjoy boating, swimming, fishing, wind surfing, sail boarding, water skiing and more. The city hub offers great restaurants and café's, excellent shopping , Art Gallery and Museum, Entertainment Centre and wonderful markets. Numerous schools are nearby . Woolworths Kirkwood is just around the corner, and the newly approved Kin Kora Shopping Centre upgrade of $150million will begin very soon. Wonderful shopping experience will be yours with over 160 stores to choose from.
Investment: here are the facts why there are investors who still are massive fans of Gladstone region: Why?
* Two more massive LNG plants to be built on top of the two already underway
* Boulder Steel to employ 1500 new people
* Massive shale oil reserves to the towns west now accessible with the lifting of the exploration ban by the Qld Gov't
* Expansion of coal export terminals - power plant conversion from coal to LNG and expansion to deal with the massive energy demands of all the new projects still to come
* New water pipeline to meet increasing demand
* New major business and industry expansion creating thousands of new jobs
* Limited land available so close to the CBD and with all conveniences and amenities closeby
ALL THIS ENSURES THE FUTURE GROWTH AND DEVELOPMENT OF THE GLADSTONE REGION - why not invest now and receive the added assurance of the 12 months rental quarantee! Buy now in your Self Managed Super Fund, as this can be sold as a single contract.
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false information or what?
 
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DavidMc said:
Yes, it's interesting.

In the same way everybody thought the boom was going to last forever, I can't help everybody is too doom and gloomy and will also overshoot the downturn.

A look at Gladstone's history will show you the area is very voliatie. Demand for LNG will only ever grow. Given that, without much other evidence, I still see the area has potential. I have two properties there, thankfully cashflow is still good (for now).
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You were saying?...

ARROW Energy is expected to announce a series of redundancies from this week as the group winds back its commitment to the $10 billion Gladstone LNG project at Curtis Island.

It is understood that managers will be travelling to regional areas such as Moranbah and Dalby early in the week to begin what is expected to be up to 400 redundancies throughout the gas group from a total staff of 1200.

Management has not delivered any official word to staff. Arrow has said "we do not comment on speculation''.

CEO Andrew Faulkner was tipped to deliver some news to nervous staff on Friday, but he did not mention job losses.

Mr Faulkner announced to staff that the board had ratified performance bonuses, and bonuses would be paid to all staff.

However, it appears Arrow is poised to become the first casualty of the runaway Gladstone LNG boom with speculation it will not proceed with plans to build a $10 billion fourth LNG train on Curtis Island and will down size its Australian operation with significant job losses.

Arrow is 50 per cent owned by Shell and 50 per cent by PetroChina. It has already been winding back staff and reducing overheads.

Several weeks ago Arrow let about 60 full-time in-house contractors go and cancelled

their graduate program.

Cleaning contractors have been told the numbers of floors at the head office at 111 Eagle St to be cleaned will be reduced from 10 to five, less than 10 months after staff moved in following a $30 million fit out and signing of a 10-year $200 million lease.

Arrow has received government approval for the Gladstone project but that is no guarantee it will proceed.

Shell has also made it clear that it is in deep cost cutting mode.

The group warned from London on Friday night that its profits were poised to land "significantly lower than recent levels".

The group said its fourth quarter profit would be impacted by weak industry conditions in downstream oil products, higher exploration expenses and lower upstream volumes.

Over 2013 the group said its current cost of supplies (CCS) profit was expected to fall 38 per cent to $US16.8 billion.

Shell also holds four other major interests in LNG projects around the country beside Gladstone.
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http://www.couriermail.com.au/busin...rrow-energy-jobs/story-fnihsps3-1226805322632

Not sure why a lot of people think LNG is going to continue to boom or be the saviour? Other countries are rapidly bringing supply online at a cheaper cost than we can... When large mining firms decide to slash and burn they do so in a brutally short time frame even if it costs them financially in the short term.
 
edge81 said:
Wow!! I really hope people look further into this and don't take this information on face value. Misleading would be a very generous way of describing it.
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Well it was probably accurate a few weeks ago! Just out of date now.

I agree with whoever said that Gladstone isn't a mining town proper, it has booms based on mining booms, but it is not as prone to true busts because of the underlying industry/shipping. However it would be very easy for naive investors to get done big time if they buy in a boom.
 
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