Rents and house prices rise in Mount Isa due to demand from mining employees
Rents have risen 22% over the past two years in the remote north-west Queensland base metals mining town of Mount Isa, driven by demand for temporary accommodation from mining employees.
PRDnationwide calculates that median rents in Mount Isa have risen to $550 per week, while house prices in the Mount Isa municipality have experienced “exceptional growth” of 12.4% per annum.
According to Australian Property Monitors, Mount Isa has median house price of $350,000 for the 12 months to August and a regional house price of $330,000.
Mount Isa lies 1,800 kilometres north-west of Brisbane and 900 kilometres west of Townsville.
The urban region of Mount Isa has around 20,500 people, according to the 2011 census, and sits directly below enormous mining operations, with smoke stacks billowing plumes into the sky day and night. Among the mining companies operating in the area is Xstrata, which operates the underground Mount Isa Mines, which extract copper and zinc-lead-silver.
Around 43% of Mount Isa residents rent.
Since June, the Queensland state government has been receiving hourly data updates from Xstrata's 10 air pollution monitoring units after the Department of Environment and Resource noted that air pollution levels in Mount Isa are much higher than other parts of the state.
Recent sales in Mount Isa include this four-bedroom house (below) sold by Brenda Slade of Vivid Realty for $380,000 on October 24.
Photograph of Mount Isa courtesy of Flickr.
Four-bedroom houses rent in Mount Isa from around $700 to $850. At the low rental point, this would equate to yield of around 9.5%
According to PRDnationwide, the largely transient miner population has contributed to an annual population growth rate of 3.1% over the past five years, compared with the nation's growth of 1.6% per annum.
Mount Isa is benefiting from significant infrastructure investment with a new gas-fired power station under way and due to be operation from 2014, with Mount Isa and Cairns base hospitals currently being redeveloped at a combined cost of $920 million.
PRDnationwide research director Aaron Maskrey says Mount Isa was established as the first "company town" in Australia, due to the discovery of its mineral resources.
“It has now become the administrative, commercial and industrial centre for the state's large north-western region.
"There are currently approximately six operational mines in the north-west region, producing lead, silver, copper and zinc with a further 62 locations of known mineral deposits.
“The recent overturn from the Queensland state government on uranium mining should allow for an economic boost to the local economy. To date there are approximately 12 known deposits of uranium within the region."
Maskrey says the influence of the local mining industry on the property market has been significant.
In a recent column for Property Observer, Terry Ryder noted that Queensland’s estimated $18 billion worth of uranium resources “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,” says Ryder, who calls Mount Isa the “most polluted town in the nation”.
However, Ryder says that 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),” he says.
Ryder says the highly polluted 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,” he says.
He does not include Mount Isa among his preferred mining town investment options, picking instead mining towns with more diverse economies including Cloncurry (grazing, tourism and mining) and Galilee basin (four mega projects including Gina Rinehart and Clive Palmer projects) in Queensland and the NSW frontier town of Broken Hill (agriculture, tourism, creative industries in addition to mining).