I hear what you are saying and know that things can change for the worst very quickly.
It all depends on the experiences we have and what we are exposed to. It is all about timing. I agree you don't want to get caught when the music stops. But what we all don't know is when this is going to happen.
Sure costs have gone up but we are not likely to see gold at $250 US and Nickel at $2.30 US again in our lifetimes. If that were to happen, I agree, Kalgoorlie from a property investors perspective would be in trouble. But what are the chances of seeing prices even close to that again.
If commodities were to stabilise for a few years and then pick up again then where would the fortunes of a place like Kalgoorlie be if gold was around $1,200 US and Nickel $12.00 US for example.
Really Kalgoorlie is not a bubble at all. It was really that 5 years ago it was too cheap and way undervalued by Australian standards so the commodities boom that has happened has brought it in line with what it should be. An average 3br house there now is about $300K - $340K and 2br units $230K to $260K.
These are not crazy prices. I know some of the newer houses in the new estates are $550K + and these are starting to get on the expensive side but for that sort of money you would be getting a near new house.
Having said all that I have been thinking recently of offloading a bit but am waiting for the rent to edge up a bit more and interest rates to head down a bit to make it more attractive for investors.
Any offloading is because I don't want to have all my eggs in one basket but I still think Kalgoorlie has good medium to long term prospects on the proviso that the whole China/India etc story continues. If it doesn't then we are probably all stuffed.
Could you imagine where we would be now as a nation without the resources boom.
Also, I am well aware of the itinerent nature of part of the population there and if the work dries up then I am sure that many will leave town. But by the same token I know there is a core population there also, but obviously mine closures, if they were to occur would affect any mining town even if the population is 30,000.
Anyway we will have all the answers in time.
What I would say is that I have never known a time where there is such a difference in views as to where we are heading in the future. ie. property market to continue up and/or stabilise or crash, resources boom to continue or come to an end.
As with any time in history like this if you get it right or close to right then you will do okay.
Thanks. I appreciate your insights into the Kalgoorlie market as obviously you have lived there and have seen what can happen when things turn or stay flat for a while.
I was warned by the agents when we first bought there to expect periods of no rent at the end of each year as back then mine workers would go back home at the end of each year and come back in February. But so far after being there about 3 to 4 years we have not had that happen yet and have never lost even 1 weeks rent.
I realise that if things did turn that this would not always be the case.
