Musings on the Pilbara. Now that the election is out of the way it would seem that the battered and bruised Resource Sector is set for a recovery in sentiment and confidence.
The lower confidence levels and the element of negativity surrounding Iron Ore of late seems completely at odds with the reality of whats happening in the Ore market. This is the case for both price and export volumes. Iron Ore prices have held up well and have in fact been steadily increasing in price over the last 12months and market price is now ranging in the $130-140 per tonne.
Up from $87/ t a little over 12 months ago.
At the same time the major Ore exporters have all been increasing their volumes of export through the Port, setting new tonnage records month on month it would seem.
With the Roy Hill mine developmental stage underway, Rio Tinto reviewing their expansion plans, FMG is increasing their export tonnage and now focussing on new projects. Combined with BHP's outer harbour expansion plans looking likely to continue, (with an announcement due before year end ) things are looking up for property owners and investors in the Pilbara and other resource driven mining areas.
We are seeing an uptick in investor interest now since the election result with the phone starting to ring again. On the leasing front there now appears to be a lot of movement as existing tenants look to upgrade their accommodation going forward, and many looking to reduce their rent as their leases lapse.
What this means to you as an investor or potential investor is that there will be some opportunities for both entry level at the lower end or for existing investors already in that market looking to increase their portfolio.
One such opportunity exists that I'm aware of is where a developer is prepared to profit share with the first group of investors in a development where they stand to make circa $150k instant equity on completion - now who wouldn't be interested in that. There are deals out there - but one has to look and be prepared to act.
For any questions or further information please feel free to make contact.
Until next time - stay positive!
Do you have more than $120k in your super fund? You could use your super to buy property - Find out how
YIP’s 2010 Investor of the Year, Patrick went from being broke, unemployed and struggling with a mountain of debt to becoming a multi-million dollar property tycoon in just eight years. Patrick got his start with just $22,000 of his own cash and leveraged the rest of the money from the banks to get him to where he is today. Having gone on to acquire a couple of commercial properties in Port Hedland, and with other projects on tap across NW Australia and abroad, Patrick has retired from his day-job as a pilot and achieved his goal of escaping the rat race.
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