Investors strike it rich in mining towns but markets still dampened in flood-affected areas

Investors strike it rich in mining towns but markets still dampened in flood-affected areas
Investors strike it rich in mining towns but markets still dampened in flood-affected areas

As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.

 

Regional towns located close to major mining and resource projects have dominated a list of locations where house sales numbers are tracking significantly above the five-year average, according to analysis by RP Data.

Top of the list is Port Hedland in the iron-ore rich Pilbara in the north of Western Australia, where the median house price is $775,000 and rental yields are averaging 13%.  RP Data recorded 61 home sales in Port Hedland during the June quarter, 22 more than the 39 houses that have changed hands on average every quarter over the past five years – a 56.5% increase.

Next on the list is Isaac in the Bowen Basin coal mining region of Queensland, where 133 houses were sold over the June quarter compared to five year average of 94 house sale while third spot is occupied by the Upper Hunter Shire in NSW’s Hunter Valley, a region synonymous with coal and natural gas extraction and where house sales are tracking 38% above the five year quarterly average.

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At the other end of the spectrum, the list of regions where house sales numbers have plummeted the greatest include areas affected by flooding and coastal regions affected by a drop in demand for lifestyle properties.

It is headed by the Lockyer Valley in Queensland, a region afflicted by severe flooding from earlier in the year, where sales have fallen by more than half.

However, most prominent in this list is the third-placed Melbourne’s inner-city unit market, where transactions are down 48% compared with the five year average, with 665 sales recorded compared to a quarterly average over 1,200. RP Data says this fall may be attributable to the combined effects of a slowdown in the local market as well as lower overseas student numbers.

The list also includes a number of lifestyle markets along the Queensland coast such as Cairns, Whitsunday, Gold Coast, Cassowary Coast, Fraser Coast and Sunshine Coast, which RP Data says are all “prime examples of how the sea change has pretty much come to a standstill resulting in few transactions around these coastal regions”. Click to enlarge

“The results highlight how the multi-speed economy is influencing housing markets particularly from a resources and lifestyle market perspective,” RP Data says.

“How long these trends persist is anyone’s guess, however clearly the resource driven markets are intrinsically linked to commodity prices and resource demand while any improvement across the key lifestyle markets is dependent on uplift in buyer demand for holiday/retirement homes and improved prospects for a rental return and capital gain which may start to once again attract investors.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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