South Australia is becoming a globally significant resources state: Terry Ryder
South Australia continues to be the most underrated and overlooked market in Australian real estate.
Few realise how significant South Australia is becoming as a resources state of global significance.
And few realise that it provides more opportunities to buy cheaply in growth locations than any other state or territory.
South Australia’s steady evolution as one of the key resources states took a quantum leap with the announcement of discoveries of huge resources of shale oil in the Arckaringa Basin - potentially the most significant event to date for the SA resources sector.
It follows the decision to allow mining in the Woomera Prohibited Area (WPA), which contains some of Australia’s largest mineral resources; the emergence on major iron ore mining ventures on the Eyre Peninsula; and the potential for expansion of the Olympic Dam mine, albeit delayed by BHP Billiton.
Exploration for minerals in SA is running at record levels, adding to optimism that the state will continue on its path to become a world-class resources region.
SA needs the economic boost these ventures will provide, as it ranks 6th or 7th among the eight states and territories on most key economic indicators.
Adelaide’s property markets have been subdued over the past 12-18 months but are set for better performance in 2013. Some markets have recorded marked increases in sales volumes in recent months and this suggests prices will rise later in the year.
Outside Adelaide there are numerous locations that fit my category of 'cheapies with prospects'.
Many of the big-ticket resources events in South Australia – including the shale oil discovery and the potential of the WPA – are likely to lend greater prominence to iconic Coober Pedy, where the median house price is $175,000.
Those events, plus major mining ventures on the Eyre Peninsula and the eventual expansion of Olympic Dam, will benefit both Port Augusta and Whyalla.
Port Augusta has a median house price of $175,000, despite annual growth averaging 12% over the past 10 years. Typical yields are between 6% and 7%.
Whyalla is South Australia’s industrial muscle city and is poised to become considerably stronger. Infrastructure, resources and property developments planned for Whyalla total around $7 billion, with a $1 billion rare earths processing facility likely to be next significant milestone in its evolution as the Gladstone of South Australia.
Median prices include $180,000 in Whyalla Stuart and $165,000 in Whyalla Norrie. Other parts of the city have medians in the mid-$200,000s.
At the other end of the Eyre Peninsula, Port Lincoln is a bustling regional town with an important fishing industry and a future that will increasingly include the resources sector. Iron ore mines in the region will result in a major new export facility being built shortly.
Typical houses are in the mid-$200,000s in Port Lincoln.
There are few other places around Australia where you buy so affordably in locations with strong growth potential.
Terry Ryder is the founder of hotspotting.com.au