In this week’s 2 minute property investment news video we discuss Australia’s rising mining costs.
The rising cost of mining in Australia means 31 projects have now been called off. The decision to cancel the James Price Point LNG project means $120 billion worth of projects around the country have now been called off.
Alan Kohler from Eureka Report says commodity prices and increasing costs to build projects are hurting the industry. He says 11 projects have had cost blowouts, up from $95 billion to $117 billion and the problem is, many companies have given projects the go ahead, only the find the ground has shifted.
On top of that – it is alarming to note that vacancy rates are increasing for some mining towns. Places like Gladstone, Port Hedland, Karratha and Roma have all had increases.
Louis Christopher from SQM Research says investors need to be cautious when it comes to buying in mining towns, which have a vacancy rate well above the national rate of 1.9 per cent. The vacancy rate in Gladstone has more than tripled to 5.6 per cent in March, from 1.7 per cent a year ago.
Finally – on the reverse of that – it seems vacancy rates in outer suburbs might soon be decreasing because Gen Y’s love affair with inner city apartments appears to be dwindling.
Property forecaster BIS Shrapnel says those aged between 20 and 34 still have the dream of buying a house with land and they’re likely to move further out of city areas as they get older and have families.