Median house price rises in Broome despite volatility: PRDnationwide

Despite its close ties to the volatile mining and tourism industries, the median house price in the Broome area for the year ending in April rose 2.5% to $685,000. 

A Broome area overview, by researchers PRDnationwide, says the Broome housing market is in a price point ‘sweet spot’ -- despite minimal peaks and troughs since the high in October 2007 of $716,000.

It covers the suburbs of Bilingurr, Cable Beach, Djugun, Broome and Minyirr.

Broome is on the Kimberley coast of Western Australia on a narrow peninsula surrounded by the Indian Ocean and Roebuck Bay, about 2200km north of Perth. The area is famous for its landmarks and natural beauty, such as the dinosaur footprints at Gantheaume Point, Horizontal Falls, and Rowley Shoals, famous for their coral gardens and abundant marine life.

The Broome area’s undersupply of dwellings has led to an increasingly mobile fly in and fly out population working at nearby mines. Tourism plays a substantial role in the market, with Broome one of the most desired holiday destinations in Western Australia.

Due to the size of the market and low number of houses sold each year, the Broome area will not see any dramatic shifts in the median price anytime soon. The report found the housing market has remained healthy despite economic uncertainty since the GFC.

Sales activity over the past decade has softened by 7.8% per annum and from the six months ending April 2008 only 654 sales transacted -- down 38% on the previous five-year period.

Most house sales have been in Cable Beach (48%), Djugun (30%), Broome (20%) and Bilingurr, with 15 sales over the past five years, 2%.

Most house sales in the Broome Area were $100,000 either side of the closing median at April this year. The $600,000-$699,999 bracket had 32%, while the $700,000-$799,999 bracket had 29%.

At first glance, the report says, the Broome Area unit market looks volatile, yet seasonal activity and short-term rental opportunities have led the market to gradually improve prior to consecutive six-month declines up to April this year’s median of $390,000. 

The unit market is expected to grow in the immediate term with a number of multi-family developments in the pipeline. Not surprisingly, the report says the suburb most active in the unit market over the previous 12 months is Cable Beach with 75 of 156 unit transactions, followed by Djugun with 42 and Broome 28.

The Broome Area median for vacant land grew rapidly over 2007, however, unlike the house and unit market, the median for vacant land fell significantly during the GFC. Since then, the scarcity of available vacant land has spurred a rapid correction with the market returning to trend, closing the six months to April at $275,000.

Over the past decade the Broome Area market has grown considerably, driven by population increases, an influx of mining and tourism investment, and the high demand for vacant land. This growth, despite some inconsistency across the house, unit and vacant land markets, is a true reflection of where the market is at, the report says.

‘’While tourism and the mining sector remain strong - and while inventory levels in the Broome area remain tight - we will continue to see a sound residential market.’’