Seasons greetings to all our clients, and we wish you all the best for the coming year. The real estate market ends 2017 on a positive note and the following reports give an in-depth overview of what’s been happening in sales and leasings throughout the year.
Fortunately the news on the Pilbara these days is mostly positive, with new industries appearing on a regular basis and the well-established companies expanding and finally, after years of savage, budget cost-cutting, spending big dollars again.
Lithium has been in the news all year, and the three lithium miners in the region, Altura, Pilbara Minerals and Mineral Resources have all began development of their respective mines around Port Hedland. This activity will further expand an already highly active transport industry and provides a welcomed diversity to the local economy. An interesting article in the Business News on October 25th quotes Port Hedland Industries Council as anticipating an increase in port tonnage of 42% over the next decade, with most of the increase within the next five years.
The $6 billion Balla Balla port and rail project, is expected to generate 3300 jobs during the construction phase and 900 permanent jobs (West Australian 21 November 2017). All this investment should translate into increased activity and economic buoyancy in all sectors of the real estate market.
On a negative note we are still working through the consequences of the market correction from the past couple of years, and mortgagee-in-possession sales are still evident throughout both Newman and Hedland. At both ends of the market cycle distressed sales distort the market. One the way down valuations are usually way above what purchasers perceive the property to be worth and by the time a sale is achieved the value could have dropped by 50%. On the way up the opposite is true as valuations reflect previous price sold and does not take into consideration demand and upswing in sale price and bank lending is ultra-conservative. The outcome is that only cash sales actually significantly move the market.
Finally, HFN has experienced a year of record activity, both in sales and PM and we thank you, our clients, for your continued support. We do our best, but if our best is not good enough please let us know. This is a tough market and sometimes tough talking is necessary to get the message across! We all look forward to a busy and rewarding 2018 . Download attachment