Mount Isa's property investment potential has improved due to the dirty business of uranium mining: Terry Ryder

Two hundred years ago a French dude called Joseph de Maistre commented that “toute nation a le gouvernement qu’elle merite”. These days it’s usually expressed as “you get the government you deserve”. 

That we do. Australians like to grizzle about politicians who break promises, but we deserve no better because we don’t punish those who do. 

John Howard had a poor record on keeping promises. but we kept re-electing him. The more he got away with, the more liberties he took. He even came up with the epic rationalisation that it was OK to break a promise that wasn’t a “core promise”. 

Many Australians are miffed at Julia Gillard over her broken promise on the carbon pricing scheme. But until we punish mendacious politicians at the ballot box, they will go on deceiving us. 

It created barely a murmur that Campbell Newman’s decision to lift the 30-year ban on uranium mining in Queensland breached a solemn vow made in the election campaign earlier this year. No one who has studied the man’s record as lord mayor of Brisbane will be surprised.

The uranium decision (which brings Queensland into line with most other states) bothers me on two grounds: it’s a broken promise, and I’d prefer they left the uranium in the ground where it can’t do any damage. 

Having gotten that off my chest, there are consequences for real estate from the Queensland Premier’s decision to allow uranium mining – although he says he won’t allow nuclear power or waste disposal in the state. Seriously. No, really, he means it. He kept a completely straight face when he said it.

 Queensland’s uranium resources (estimated by the Queensland Resources Council to be worth $18 billion) mostly lurk in the state’s north-west, a lot of it not too far from Mount Isa. One of the largest known reserves is just 35 kilometres outside the town. 

I haven’t been a huge fan of Mount Isa as a place to invest in recent years because the rental returns have been little better than in capital cities. You don’t buy in mining towns unless you’re compensated for the higher risk by yields big enough to generate positive cashflow. 

Even then I would be reticent about Mount Isa, which has built a reputation as the most polluted town in the nation. Indeed, it’s the very place I’d expect the dirty business of uranium mining to flourish. 

But from the cold perspective of pure bloody-minded investment potential Mount Isa has improved of late. Rents have risen, yields have improved and over the long term it has a good capital growth record (the various suburbs of Mount Isa have long-term growth averages ranging from 11% to 16% per year, according to Australian Property Monitors). 

There are a number of new resources projects in the general area for which Mount Isa is the key regional centre – and as they’re neither iron ore nor coal projects, they’re not so concerned about the recent decline in world prices for those commodities. 

Mount Isa is about copper, gold, lead, zinc – some of them metals you don’t want to be living near when the processing is going on. And, now it seems, uranium. 

Mount Isa mayor Tony McGrady, previously a minister for mines and energy in an ALP state government, supports uranium mining and says it will spark a mining boom in the region. 

That remains to be seen, particularly as nuclear power has taken a popularity dive following the Fukushima event in Japan. 

Any impact that evolves from the decision will take some years to be felt. Mines don’t become operational overnight. 

Anyone inclined to take a punt on this becoming a major new industry in a couple of years can expect to pay somewhere in the $300,000s for a Mount Isa house. Typical rents are around $500 per week and gross returns are about 8%. 

Cloncurry, not far from Mount Isa, is moving into a growth phase because of surrounding mining enterprises. It may also get some economic impact from an evolving uranium industry and has cheaper buy-in prices (median house price about $250,000).

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.