Gladstone leads dramatic rental vacancy rise in mining towns: SQM
There is a rising trend in rental vacancies in mining towns across Queensland and Western Australia, according to the latest data from SQM Research.
Some of the mining towns that now have high vacancy rate rises are:
- Gladstone (QLD) 5.6%
- Port Hedland (WA) 4.6%
- Karratha (WA) 3.7%
- Roma (QLD) 2.6%
SQM Research managing director Louis Christopher says investors need to be cautious when it comes to buying in these towns which have a vacancy rate well above the national 1.9% vacancy rate.
The vacancy rate in Gladstone, Queensland has more than tripled to 5.6% in March from 1.7% a year ago.
In Port Hedland the 4.6% rate compared with 1.6% a year ago. The 3.7% vacancy rate in Karratha compared similiarly last March, but with 0.2% two years ago.
“Property investors over the past 10 years have done extraordinarily well if they held real estate in mining towns,” SQM managing director Louis Christopher said.
“However, there is always a risk that when a downturn arrives these markets could have a very rapid and severe correction.”
"We are now watching the data very closely on the various mining towns in the country," he says.
"We remind investors to remain very cautious when it comes to these towns."
Canberra’s rise in rental vacancies has been noticeable since July 2012 and may be associated with a well-known increase in apartment developments, together with federal government attempts to reduce the budget deficit, says SQM.
For other capital cities, vacancies generally remained steady or modestly declined for the month of March. The net result at a national level during the month was 52,931 vacancies, which represented a vacancy rate of 1.9%, which was similar to the preceding month.
