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Is Port hedland a good choice?

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| 18 Nov 2010, 10:44 PM Agree 0

Hi guys, I’ve been reading a lot about Port Hedland for a while, but never had the money to look into it seriously. From what I can tell, growth’s been about 20% p.a. and rental returns are pretty good. I’ve got the money now, but I’m worried that the market there has peaked already. Anyone think it’s still worth investing there?
  • patchy | 22 Nov 2010, 05:35 AM Agree 0
    It looks like growth is likely to continue what with all the investment announced in the Pilbara, but the entry costs are, frankly, eyewatering... What about South Hedland, it's (a bit) cheaper - or other Pilbara towns like Karratha?

  • Yelloow | 22 Nov 2010, 05:41 AM Agree 0
    Thanks patchy, I'll have to check out some of those areas!
  • jon79 | 22 Nov 2010, 11:47 PM Agree 0
    Maybe Geraldton too?
    Not exactly a new hotspot, but theres a new port going to be built there soon(ish)
  • Ben Kingsley | 11 Jan 2011, 12:09 PM Agree 0
    The smart money to be made in these locations is about being creative with the asset selection and overall structure of the deal. Meaning yes entry costs are high, as wage growth is correlated in the value growth. Whilst employment not only in the local area but within a reasonable distance remains high, expect wage pressures to continue and if they do value and yeild growth should remain high.

    'Creative' is about the deal you need to find, as with any location, there are always opportunities to explore.
    Look for under median value properties with value add upside. Note: These type of deal are time intensive, so work out the real return by factoring in your time effort.
    It not a place I advise my clients to buy a set and forget unless the yeild is great than 10% on the property and its built to withstand miners punishment, becuase the renter will be frequently changing.

    True passive investors should not enter these markets, they are for speculators and higher risk takers, but if done well the returns are can be superior. My advice is model the type of return you are would be happy with and then at least your approach is a focus and unemotional one.

    Ben Kingsley
    Qualified Property Investment Advisor
    Founder Empower Wealth
  • Jeano | 28 Jan 2011, 03:31 PM Agree 0
    I think the Port Hedland market has left a lot of investers behind the rent are fantastic but the enrty price is to high for alot of investers, you wonder how far it can go though, Similar to Karrartha, my sad storey about karratha 7 yrs ago i could have bought a brand new house there 400k but hubby said "too dear", now......
  • Eos Property | 09 Aug 2011, 12:16 PM Agree 0
    Port Hedland is land locked with no further land being available. There are some developers bowling over older properties in Port Hedland and building single bedroom apartments. Sale price for single apartments in Port Hedland is around $750K.

    Travel to South Hedland and similar property is $250K cheaper with similar rent returns.

    Water is a major issue at the moment and new territory developments will have inordinate amount of delays getting water approval. Bowl over and redevelop and water is easier to access. We are investigating some interesting concepts in South Hedland with excellent instant profits and high rent returns.

    A blog article on Port Hedland
  • Eos Property | 14 Sep 2011, 12:00 AM Agree 0
    Just an update.

    There are a couple of comprehensive WA Government reports into plans for the Pilbara region of WA. The WA Govt wants to triple the size of Hedland and Karratha in the next 24 years. (Google Pilbara Cities Report) The Pilbara Cities Report also identifies a massive injection of government and mining money to make Karratha, Hedland and Newman more attractive to people. Money will be spent on service provision, recreation & commercial facilities.

    The WA Government has released a report titled "Port Hedland Area Planning Study" which complements the "Pilbara Cities Report"

    On top of this you thrown in BHP, Rio Tinto and Fortescue Metals Group plans to expand their infrastructure in the Pilbara (BHP need 34,000 new employees in the Pilbara next year alone) and the Pilbara area is poised for continuing (another?) surge in prices.

    As someone else has said the cost of housing is prohibitive $800K+ depending upon where you buy. Rent returns fantistic have to have the capacity to borrow large sums of money.

    We are working with groups of investors and securing re-development sites on their behalf. The partners employ a project manager who manages the project for them, reports back monthly, and who is in constant contact with the owners. This allows the partners to 'own' a furnished South Hedland property (1 X 1 X 1) for $360K (Similar property on market for $520K) and with rent returns of $1100/week.

    The one bedder market in Hedland is under supplied at the moment. Even teh caravan parks in South Hedland no longer take travellers - they have moved to onsite vans. BHP (alone) requires 6000 beds each year in 2011, 2012 and 2013. There are currentyl plans with the Hedland council for 200 beds.

    Definately an undersupllied market.

    Hope this update helps those considering the Pilbara region.

  • camjanice | 15 Oct 2011, 01:02 AM Agree 0
    I was speaking to a local and they said that there is a fair amount of discounting going on in South Hedland at the moment. They said 1 million dollar properties were selling for 850000.
  • Eos Property | 24 Oct 2011, 07:52 AM Agree 0
    Hi Janice,

    Interesting slant on things - we are seeing teh opposite. We find a suitable site listed and it generally goes within a day or two and is 'off the market' before we can contact our investors. For this reason we are also looking at Karratha and getting some relaly good prospects with high capital profits with terrific rent returns.
  • Eos Property | 28 Oct 2011, 09:07 AM Agree 0
    Terry Ryder's recent 'Hotspotting' report gave a detailed list outlining the private and government investment plans for Hedland and the areas immediately surrounding Hedland. The dollars to be spent by various agencies gives compelling argument why people could consider Hedland in their investment decisions.
  • Eos Property | 18 Nov 2011, 12:16 AM Agree 0
    A recent annoucement about Karratha

    Looks like our investors will get a piece of this too.
  • Myproperty | 11 Dec 2011, 06:04 AM Agree 0
    South Hedland and Karratha have shown exception growth. Luckily we have owned there for some time and seen almost staggering rental growth in South Hedland. Considering the still mega investment planned by the blue chip and junior mining companies it has some time to run yet. But there have been announcements of large residential and retail shopping developments in both towns, I suppose the question is one of supply and demand..

    Karratha is likely to temporally slow down during the next few months as Woodside hands back some 50 rental houses as their housing requirement for the Pluto development ends. But there always seems to be someone new in town requiring rental properties. It was jokingly said the GFC lasted for just under two weeks in the Pilbara. So for the potential investor this could be an area to consider for a next rental investment purchase. I believe also the negative property commentators on TV who have continually advised not to buy in mining towns are beginning to realise that if major mining companies are continually investing billions of dollars they have some idea how long their order books are to be kept full by the emerging countries particularly China and India. And not to be missed, Australia’s GDP is reported to be rising to 4 per cent next year. The highest since 2003.

  • Eos Property | 12 Dec 2011, 07:40 AM Agree 0
    Just reading a report atm showing investment in housing and community infrastructure by government departments will total $500m in the next few years. upgrades are all designed to make Hedland more 'liveable' and include improvements to schools, shopping centres, seweareg treatment plants, recreation facilities, airport, housing for key govt workers, hospitals etc.

    On top of this there are considerable sums being invested by the various mining companies - their investment is separate to the list above. It can also be said the government list (above) is petty cash for the mining companies.
  • seven | 18 Dec 2011, 06:02 AM Agree 0
    What about the new city of Karratha to be built? Will the extra housing planned in this new development affect properties in Pt Hedland, South Hedland etc.?
  • jon | 18 Dec 2011, 10:27 PM Agree 0
    Karratha is 242km away from Port Hedland. So it really depends if there's many resources projects roughly halfway between the two that can choose which city's infrastructure to use as to whether this will have an impact upon Hedland.

  • Eos Property | 18 Dec 2011, 11:43 PM Agree 0
    Hi Seven,

    Karratha and Hedland are quite some distance apart and they each serve their place in the Pilbara.

    WA Govt plans to increase both towns to 50,000 people under the Pilbara Cities project. On top of this both Hedland and Karratha have major mining infrastructure investment plans underway and in the pipeline. This investment is significantly more than that proposed by the WA Govt.

    Further to this Karratha has LNG to complement any iron ore mining activity that positively impacts on Karratha. At the same time Hedland is being positively impacted by iron ore mining carried out by BHP and FMG with FMG really starting to ramp up operations north of Newman which is also teh centre of much of BHPs iron ore mining activity.

    We have people on the ground their two weeks ago and the came back suggesting there is little difference between the two towns.

    At the moment we are finding development projects in Karratha for an investment of $390K (comparables $525K and renting for $1100/week)

    For some reasons the agents in Karratha seem to understand the need of development managers like the people we work with better than those in Hedland. For this reason we are getting good heads up on suitable pre-zoned blocks in Karratha that are close (~200m) to the soon to be upgraded town centre.

    Hope this helps.
  • MyPropAU | 22 Dec 2011, 02:12 AM Agree 0
    My South Hedland experience. Purchased 3x2x2 house in late 2007 on 700m2 block. Price $670,000. New letting at the time of $1300 pw to national corporate company, showing a 10 per cent return. Cash flow positive from day one, even without taking into account tax depreciation deductions.

    Just agreed new letting at $2400 pw to blue chip company, one of five applicants who inspected. Even at a rental return of about 12 per cent should show a value of about $1m. If you look on line there is nothing currently available for rental. As for the future, I understand mining towns are particularly volatile, many with a boom and bust reputation. We have to understand high rental and / or capital returns generally come with some risk.

    But you have also to consider the confidence the mining companies have in the Pilbara, currently investing billions of dollars and that China’s iron ore demand is not expected to peak until 2016 and then start reducing from 2018. India is thought to be 14 years behind.

    If you purchased now in South Hedland you should get an excellent rental return. Regarding proposed plans to increase the towns size, with rental and capital values it will come down to the normal drivers of supply and demand.

    So the astute investor will have to keep watching the situation and know when to sell if the market starts to change. The question? Would I buy another investment property there. Probably not.. I’m focussed on Queensland’s’ coal and LNG areas.

  • Kezza | 14 Jan 2012, 10:15 AM Agree 0

    I currently fly in and fly out of Port Hedland. If you are investing in the area make sure you get some local knowledge, there is a lot of problems with Aboriginals, especially in
    South Hedland. Area's you drive through have trash up and down the streets, smashed glass and regular fights. Most people have very high fences to keep theft down with big dogs behind the fences.

    Another thing to be wary of is a lot of houses are fibro that have been renovated to look like the new colour bond houses in the area. I have never been a subscriber to buying unseen like many investors and Port Hedland and South Hedland with the prices they are demanding should be well and truely investigated.

    Kerrie Mercel
    Mobile: 0422-695171
    Property Prospects Australia Website,

    The below is taken from the Port Hedland Town Planning Document

    Housing in Port Hedland is expensive and generally in short supply. Because it
    is subject to the economic cycles of the mining industry, Port Hedland has had difficulty
    developing and maintaining an adequate supply of quality housing due to constantly
    shifting demand. In addition to the challenges of an unpredictable market, appropriately
    zoned coastal land is in relatively short supply, while South Hedland, with its more
    abundant land supply, suffers from a reputation dominated by negative perceptions of
    increasing crime, poverty and social dysfunction. This contributes to high housing costs
    and an extremely tight market, frequently low standards of quality and maintenance,
    and limited choice in types of available accommodation.
    The situation is further impacted by housing subsidies that the large mining
    companies are willing to offer their employees, and the sub-standard conditions that
    some workers are willing to accept on a temporary basis while they hold lucrative
    jobs in the mining industry. While the provision of rent-subsidised accommodation
    drives the refurbishment and construction of new units, both of these influences on
    the housing market contribute to inflation and volatility in housing costs that have significant
    impacts on the rest of the community. With an unacceptable proportion of
    lower-standard housing and rapidly increasing sale prices and rents, it is difficult to attract
    middle-income employees to Port Hedland. This in turn leads to a deterioration
    of services, which further reduces the appeal of Port Hedland as a place to live, thus
    stimulating a high turn-over in the population of the town and exacerbating the instability
    of the housing market.
    Port Hedland’s existing housing stock is concentrated in South Hedland which
    contains approximately 70% of the total number of residential properties in the town
    (Figure 7). The remainder are distributed through the neighbourhoods on the coast, including
    West End/Cemetery Beach (17%), Cooke Point (11%) and Pretty Pool (2%)4.
    On terms of unit type, three and four bedroom detached houses account for over 75%
    of the existing housing stock5.
    At the upper end of the market, the issue is the limited availability of units in
    the desirable areas of Pretty Pool, Cooke Point, Cemetery Beach and the West End.
    4 Town of Port Hedland Property Register. Th is estimate refers to the number of residential lots, not
    the number of housing units, and does not include residences in Wedgefi eld or the fi ve residential
    properties in Redbank.
    5 Australian Bureau of Statistics, Expanded Community Profi le Port Hedland (T) (LGA 57280),
    Catalogue No. 2005.0, Table X49.
  • MyPropAU | 17 Jan 2012, 11:45 AM Agree 0
    South Hedland market conditions are currently extremely interesting. At present I’m sure there is a rental crises with only about 13 properties available for let. Our property was on the market over Christmas and received within a few days five rental applications. One of them from a blue chip company at over the asking terms and a whopping 25 per cent increase from the previous tenant. More here:

    The interesting point is, capital values as yet have not followed rentals being agreed and according to our managing agent the property is worth just about the same value as without the rental increase.

    On this basis the return would be a huge 14.25 per cent rental yield. The agent says valuers will not take into account the high rentals but only values of recent sales. Also saying they knock back mortgage applications where high selling prices have been agreed. With South Hedland on Terry Ryders “Hot List” for 2012 it might just be a limited opportunity to buy a property now that will have a great rental yield while and capital values catch up during the year.


  • Eos Property | 26 Jan 2012, 02:01 AM Agree 0
    Hi Kezza,

    You're not wrong about the 'unique factors' in South Hedland. We are lucky we have long term South Hedland locals acting as our 'local knowledge' - their considered feedback is proving invaluable.

    The difference in property prices between Port Hedland and South Hedland is considerable - we steered away from Port Hedland due to affordability issues and, instead, focus on the better areas of South Hedland with suitable zonings in place already.
  • MyPropAU | 26 Jan 2012, 11:25 AM Agree 0
    Local knowledge is key when deciding to buy an investment property. For the moment South Hedland seems fairly well protected due the current company and infrastructure investments which are still considerable. Personally, I never understand the professional property commentators who advise all due diligence and research can be undertaken on the internet while also making some local enquires.

    I believe you have to visit an area to get the true picture. While there has been very positive growth in the Pilbara the markets can still be rather volatile. For example, an extreme rental shortage in South Hedland has seen rental values jump during the last few weeks. Conversely, local comments in Karratha indicate that Woodside are about to hand back about 50 houses. There are now many houses for rent on the market and rental values are currently falling. With the longer term investment in the area I’m sure this is a “blip” in the market. But you need to know when buying.


  • camjanice | 03 Feb 2012, 03:57 PM Agree 0
    I second Kezza on being careful with picking your streets in Port Hedland. My friend is a police officer there and they live in a bad street with constant vandalism and noise from rowdy aboriginals who pass through. They even had a murder in their street the first week they moved there! Crazy considering the cost of the houses. I live in Tom Price and no one here likes going to South Hedland, we all go to Karratha which is nicer. Much better shopping too. However the money is being spent in Hedland, so not saying it is not a good investment, just be careful. i wonder if insurance is high too?
  • Tom | 25 Jul 2012, 03:28 AM Agree 0
    I think it is still worth investing on a property to rent out. The statistics and studies have shown that there is a relevant growth in the properties being rent.
  • Eos Property | 26 Jul 2012, 12:58 AM Agree 0
    Lots of research required in Hedland at the moment. Some game recent potential game changing decisions have been made so make sure your research is thorough. We stepped out of the market a few months ago while we try and get a handle on recent developments.
  • Eos Property | 26 Jul 2012, 01:00 AM Agree 0

    I continue to be amazed that Police (in particular) and teachers are housed in less desirable areas within a community.

    As an ex-teacher who was housed in Kalgoorlie's Adeline Area many years ago (the local call it the Bronx) I can understand your friends wariness.
  • Kris | 26 Jul 2012, 07:37 AM Agree 0
    I looked into Port Hedland quite thoroughly a little while back, and while the rental returns are undeniably some of the best in the country, I decided that personally I couldn't justify the entry price. My strategy involves both cash flow and capital growth, and while Port Hedland probably hasn't run out of steam in terms of capital growth, in my opinion it is a lot closer than other places around the country. I'm sure that buying in Port Hedland would suit some investing strategies, but for mine I believe there are better options elsewhere.

    I dealt with Troy from Macro reality when I was looking into Port Hedland. While I didn't end up buying anything from him, he was quite professional to deal with and had a fantastic knowledge of the area.

  • APWPG | 29 Jul 2012, 06:26 AM Agree 0
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  • Bennett | 29 Jul 2012, 07:11 AM Agree 0
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