Stay Away From This Suburb

Kalgoorlie has experienced bouts of growth over the past 2 decades, but 99% investors never truly understand why you do not invest in suburbs like this!

Suburb Details:

I want to start this article by saying you should never invest in a suburb like this, so if you purely read this newsletter for finding suburbs where you can invest its best you click off now. However if you want to understand why you don’t invest in suburbs like this take 5 minutes out of your day to keep yourself informed!

When you search for properties for under $450k you will find a numerous number of properties available in Kalgoorlie. Now this doesn’t mean you go and buy there blindly because that is all you can afford. You really need to think “why there are so many listings for under that price”. The median price in that suburb is $350,000 and as a shrewd investor you should always be attempting to purchase property under that median threshold.

This suburb is an excellent case study of why you should not invest a mining town for long term sustainable house growth. Yet investors still buy into the hype and media articles and pour money into these mining towns.

Key Data Metrics

Location & Infrastructure

Situated in the Goldfields-Esperance region, Kalgoorlie lies approximately 595 kilometres east-northeast of Perth, the capital city of Western Australia.

The town's infrastructure is primarily geared towards supporting mining activities, with numerous mines and processing facilities scattered throughout the area. Kalgoorlie's economy revolves around the extraction and processing of gold, nickel, and other minerals. The Super Pit, one of the world's largest open-cut gold mines, is a prominent feature of the town's landscape.

In terms of infrastructure, Kalgoorlie boasts essential amenities such as hospitals, schools, shopping centres, and recreational facilities to support its population. It even has a golf and a horse racing club! The town has a bustling central business district (CBD) with a mix of modern buildings and historic architecture reflecting its mining heritage.

Transportation plays a crucial role in connecting Kalgoorlie to the rest of Western Australia. The town is serviced by the Great Eastern Highway, which provides road access to Perth and other major cities. Additionally, Kalgoorlie is a key stop on the Indian Pacific railway line, linking Perth to Sydney. There is also a major airport which will allow residents to fly in and out of major cities and allow the easy transportation of workers into the area.

Its is completely justified to say that Kalgoorlie is an extremely well built up and established regional mining town, but that doesn’t mean people want to live there long term.

Other Important Factors:

Investing in mining towns carries substantial risks due to their heavy reliance on the resources industry. While this dependency can boost the property market during good times, it also exposes the local economy to significant vulnerabilities when the industry falters. This poses challenges for investors on several fronts. As an investors who wants long term sustainable growth over a 10-15 year period you want to ensure that the economy is diverse and not reliant on one industry.

In these towns, a considerable portion of the population comprises temp workers employed within the industry itself. This influx of workers can drive up demand for rental properties during peak activity periods, offering enticing opportunities for investors to capitalize on high rental yields (close to 8-10%) and market appreciation. However, this same dynamic can spell trouble for the property market if job opportunities dwindle due to mine closures or reduced labour needs. Given that many residents are there solely for work, such events can trigger a sharp decline in the local population, thereby eroding a critical source of demand from the housing market.

Nearby Major Projects:

• $4 Million State Funding For Infrastructure Boost

• Kalgoorlie Rail Realignment Project

• Major Mining Projects In Kalgoorlie

Example Property:

_{*Note: These calculations are purely estimations, but overall numbers will vary depending on your deposit, interest rates and other factors.}

Pro’s Of Investing In Kalgoorlie

• Strong rental yields.

• Easy access to airport & only 10 minutes to town centre.

Con’s Of Investing In Kalgoorlie

• Does not have strong economic diversity, far too reliant on mining.

• Current Stock on market is too high.

• Days on market is far too high even for a cooler market.

• Renter population is close to 50%

• Vacancy Rate is high compared to other suburbs within same price point.

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_{Disclaimer: The information provided in this article is for educational and informational purposes only. It is not intended as financial, legal, or professional advice. Always do your own research and consult with a qualified professional before making any decisions. The opinions expressed here are solely those of the speaker and do not reflect the opinions or views of any other organization. By using this information, you agree that the creator of this content is not responsible for any financial or other losses you might incur.}