You maybe interested in looking into this??
I have been involved in the WA Real Estate and building industry since 1991. We have our own business in Bunbury called DAD. We won the 20 - 50 employees Telstra WA Small Business of the year last year (2004). We have been involved with a number of local developments in the SouthWest and have been branching out investment wise (as part of our business) into the NorthWest in Port Hedland, The Great Southern in Albany as well as holding Real Estate options in North Queensland and Kangaroo Island SA.
After a recent visit to Kambalda I believe I have discovered the next boom place. Rental returns are just about on par with most other places $120/week - $300+/week with values extemely low $42,000 - $125,000+ (more than a quater of the replacement value). The Real Estate market in Kambalda is the most exciting market I think I have ever seen. The geography of the town itself is not dis-similar to the Collie/Bunbury market with Kambalda's location within 56 KMS of Kalgoorlie (Kal is going absolutely crazy on the back of record Gold/Nickel prices). Coolgardie just down the road according to the Sunday Times rose by 60% last year and Kalgoorlie seems to be on the up and up. The beautiful thing about Kambalda is last year according to the Sunday Times it rose by only 6%!! Why??? Who knows. On the back of all this information I decided to do some digging. My brother in law is the manager at ESS Kambalda. This company services the mining staff world wide. He has signed large contracts for the next 5 years to help with expansions companies have on their drawing boards in the Kambalda region. I found out next that Kambalda not only has gold but also has some of the purest seams in the world! Nickel as well is in a great abundance here. In fact perhaps this is a better prospect for the growth in the area than its gold reserves? Gold and Nickel are at record levels. The creation of 350,000,000 new middle class Chinese in the last two years will only fuel demand for gold (apparently this is the way they illustrate their wealth, just in time for the Olympic games).
Michael Kiernan's Consolidated Minerals have massive plans for Kambalda in the next month or so (check their recent press releases 27th October 2005 in particular on their web page!!). The shire of Coolgardie have about 400 blocks of land ear marked for development. In a market where there are only 1200 houses and no builders avaliable to build new houses the chances of Kambalda's Real Estate prices going through the roof are pretty good. I have seen the market shift in the the last month. The shire CEO based in Kambalda
is Mal Osbourne. The local Kalgoorlie press has run an article last month interviewing both Real Estate agents in town......very interesting indeed. The headline "Property boom in Kambalda" one of the agents in the ad quoted despite advising investors against buying in town he had enjoyed record sales recently and so had the other agent in town (it takes me back to the begining of the Bunbury boom! Hind-sight is 20/20!!) At the same time the Prime TV network (GWN) called me up as they had found out I had invested in
In my experience Real Estate Booms happen when two elements come together:
When the purchase price is well below replacement and when demand hits!!
When this occurs the prices are on the up and up ie Bunbury, Dunsborough and Busselton presently. People then rush in and buy! Crazy. You make real money just before the two come together not after. I hope you find some use for this info.
To keep you up to date with what is happening in Kambalda as of today. Consolidated minerals announced last week that their new expansion at the East Alpha mine is going ahead in March quarter 2006...This is to keep up with the growth of the middle class and the wave of Chinese urbanisation that is supporting the demand for commodities such as nickel for stainless
steel. Chinese consumption has more than trebled this decade to 4.5 Million Tonnes (the size of the Western European market!!). It is forecast to grow to 7 - 8 million tonnes over the next 36 months!!
Consmin has announced last week a $10.5 Million exploration budget in the Kambalda region. The main aim is to increase production via East Alpha to double that of 2005 during 2006. Further levels over the next 18 months or so will see up to a quadruple effect from 2005 levels to up to 20,000 tonnes per year. Mincor are also looking at simular increases. The BHP concentrator in Kambalda will be working over time as new expansions by BHP in the Lienster/Leonora regions are still refined in Kambalda.
Consmin is planning to build it's own concentrator in Kambalda.....the amount of jobs that that will create is scary stuff. Kambalda's population has more than doubled over the last few years to 6000 and pressure on the accomodation in town is just about to hit big time! In a town where there is only 1200 houses a big influx of workers is creating a bit of a stirr. Although there is still 50 or so rentals avaliable at the moment the natural flow of people into town during the new year will erode this number rapidly. Looking at the amount of homes being snapped up by investors recently and the speed that a few of my own rentals that have been rented recently (2 Kurrajong bought for $117K rented by a company for two years at $220pw, another 11 Cassia bought at $138K now rented for 12 months at $260pw) illustrates a very healthy Real Estate enviroment in the early stages of a massive boom!
Keep an eye on the valuer generals report on the amount of Real Estate that is currently settling, you'll be amazed!
We have bought a few houses in one syndicate so far.
There are still a few good solid buys left Check it out www.realestate.com.au Kambalda houses $50,000 - $200,000.