Mining towns flex muscles in WA property market
Mining towns have set the pace for property price growth in Western Australia, with three north-west towns recording significant increases in the past year, new statistics show.
Data compiled by realestate.com.au shows that the iron ore mining town of Newman is leading the charge with 29 per cent property growth in the year to May.
Meanwhile, the suburbs of Millars Well and Pegs Creek in the Pilbara town of Karratha netted increases of 27 per cent and 18 per cent respectively in the same period.
The realestate.com.au data for growth suburbs looked at the largest sales price growth for houses in areas with 30 or more homes listed for sale for the 12 months to 31 May 2019.
Here are WA’s top 10 growth areas for the 12 months to 31 May.
BHP’s decision to offer drive in, drive out rosters to encourage a better work-life balance by having workers living locally in Newman, rather than fly in, fly out, is believed to have had a positive flow-on effect to the local property market.
Nerida Conisbee, realestate.com.au’s Chief Economist, says the data shows a significant turnaround for mining towns after a bottoming out of the resources sector and flailing property prices in recent years – not only in WA but across the country.
“The Perth market picked up in 2017 but really got shut down by the Royal Commission. It was quite similar to what happened in Sydney and Melbourne. The interest rate cuts have been helping,” Conisbee says.
“But the other thing that has been happening more broadly across Australia is really impressive growth in pricing for cities and towns that are reliant on mining.”
“These towns have not seen growth for some time and have become very cheap, but places like Whyalla in South Australia have seen 20 per cent rental growth and are now seeing 20 per cent-plus sales price growth so there does look like there is a bit of a return to those mining towns with projects up and running again.”
Karratha agent Rob Sleator, from Pilbara Real Estate, says there has been a recent uplift in prices and buyer confidence across the Pilbara.
“The average wage is twice the national average. The build cost is twice because it’s 1500km from Perth, plus cyclone rating, so you would think an average house up here would be worth $600,000, while an average house in Perth is $500,000; but we’re still at $400,000,” Sleator says.
“It’s still really good value, but that growth level is mainly because a lot of the houses we were selling were in such poor condition. They probably should have been condemned.
“Millars Well and Pegs Creek had the majority of low price sales in 2015/16 and early 2017.
“Some properties sold for as little as $160,000 and were typically brick, ex-government houses in poor condition… This dragged the market median down.”