Remote Cloncurry, Queensland, a hotspot with high yield potential: Terry Ryder

Property investors should take a good look at the remote, historic Queensland outback town of Cloncurry, about 770 kilometres west of Townsville, according to hotspotting.com.au's Terry Ryder.

The town is the birthplace of the Royal Flying Doctors service and maverick independent MP Bob Katter.

Cloncurry is one of just three mining hotspots picked by Ryder – the others being coal seam gas-rich the Galilee Basin (inland from Townsville and Gladstone) and Broken Hill in outback NSW, where there are $7 billion in mining projects.

Ryder's mining town recommendations come with the warning that all mining towns are high-risk property investments – though with the potential for strong gains –  and only suitable for those investors with a high-risk appetite.

In Cloncurry's favour is the fact that it is the focus of a number of mining projects but also has ties to the grazing industry and to outback tourism.

“Cloncurry is not essentially a mining town, but a regional town of just 3,000 people far north-west Queensland near Mt Isa,” said Ryder in a Property Observer webinar.

“It services the grazing economy around it and the tourism industry, as it is quite a historic town.

“Mines are starting to spring up around it and are entering the construction phase.

“The good thing is they are not iron ore mines or coal mines (where commodity prices have fallen), but copper and zinc mines."

Major mining projects include Xstrata’s $580 million expansion of Ernest Henry mine (named after the founder of Cloncurry), which produces copper, gold and magnetite.

Other mining projects include the Cudeco copper mine just outside Cloncurry, where blast-hole drilling and other pre-blasting activities are now complete, MMG’s Dugald River project – one of the world’s largest and highest grade known undeveloped lead-zinc-silver deposits and Xstrata’s Mt Margaret mine, which will produce around 30,000 tonnes of copper per year over the next five years. 

At the same time a multi-user rail facility is being built to service all those mining companies and due for completion in mid-2014.

The median house price in Cloncurry is around $260,000, making it one of the more affordable mining hotspots.

Ryder points out this is well below the median house price in other mining towns in Queensland, such as Moranbah and Dysart, where the median price is around the $700,000 mark.

“We are potentially going to see growth in prices and rents in Cloncurry as these mining projects create housing demand from those workers involved,” he says.

Houses in Cloncurry are not pretty, but recent sales show the potential for capital gains.

They include this four-bedroom fibre cement house (pictured below), which sold through Elaine Raffin from RealWay Property Consultants Mount Isa for $245,000 in January this year.

The property last sold for $130,000 in February 2006.

It is listed for rent at $500 per week a gross yield of 10.6%

Another relatively recent sale was a three-bedroom wood panel house (pictured below) sold by Jean Rutherfurd also from RealWay Property Consultants Mount Isa.

The house sold for $300,000, having been listed between $275,000 and $325,000.

Cloncurry Shire Council sold the 914-square-metre block of land for $21,000 in November 2005.

Assuming rent of around $400 per week would equate to a yield of around 7%.

The majority of 1,300 dwellings in Cloncurry are houses, and two-thirds of these are three and four-bedroom houses according census 2011.

A high percentage – 52% of dwellings in Cloncurry– are rented, with only 22% of residents owning their homes outright.

In 1861 Burke and Wills with King and Gray were the first Europeans to come into the area on their ill-fated expedition to the Gulf of Carpentaria. Burke named the river “Cloncurry” for his cousin, Lady Elizabeth Cloncurry of County Galway in Ireland.

The Australian Aerial Medical Service (known more commonly as the flying doctors) took off on its first flight from Cloncurry on May 15, 1928.

The service made use of a de Havilland DH.50 aircraft hired from the then small airline Qantas.

A Royal Flying Doctor Service museum is situated in the town.

The town also includes the Mary Kathleen Memorial Park and Museum, with its notable memorabilia being a water bottle used by famed explorer Robert O'Hara Burke, who led the ill-fated Burke and Wills expedition from Melbourne to Gulf of Carpenteria and who died, alongside Wills and five other explorers, on the return journey.

Traces of copper were discovered at Cloncurry in the 1860s by John McKinlay, while searching for Burke and Wills, with pastoralist Ernest Henry discovering the first copper lodes six years later.

To listen to all of Terry Ryder’s tips for property investors looking to benefit from the mining boom, view Property Observer’s free webinar here