The resources sector slowdown has hit mining town property markets hard how low did they go

← Homepage

THE resources sector slowdown hit mining town property markets pretty hard with prices dropping by as much as 78 per cent in some regions.

But with iron ore prices starting to lift again, will it be enough to turn around the fortunes of the property market in the mining regions?

CoreLogic research analyst Cameron Kusher has looked at the performance of the housing markets in Australias major mining towns.

He said there was a likelihood that at some point in the future commodity prices would boom again but he didnt think it would affect property prices in the immediate future.

Whether a future boom (in resources demand) leads to the type of investment in expansion in operations leading to a surge in demand for workers is possibly not as clear. If it were to happen any time in the near-term it is unlikely we would see property prices boom like they did recently.’

Mr Kusher said the property boom had not been a result of commodity prices rising but the investment in mining construction and expansion which required more workers at the same time as there was insufficient housing supply.

Whether a similar expansion in the future requires as many workers as the last one did remains to be seen especially giving technological advances which may mean more of these jobs can be automated.’

RELATED: Iron ore prices hovers at six year high

He said the smaller mining towns experienced a bigger drop in prices than some of the bigger centres, although drops since the peak of the market had been substantial’ in all the regions.

The good news according to Mr Kusher is that in some regions sales numbers were starting to slowly lift, but not enough to lift prices.

(It) could potentially be due to larger numbers of distressed sales moving through these markets, but may also be attributable to a cautious return of buyers seeking out a bargain,’ he said.

How the major mining regions fared

Port Hedland (WA)

Median prices peaked at $925,000 in June 2013 and were now 58 per cent below that peak at $390,000.

In what may be a positive sign for the market, annual sales are once again trending higher, although the median prices trend is yet to bottom out,’ Mr Kusher said.

Isaac (QLD)

Median house prices hit a high of $620,000 in November 2012 and took a big 78 per cent drive to $138,390.

Mr Kusher said although transaction numbers had again started to life, median price growth remained negative.

Karratha (WA)

Median house prices hit $815,000 in October 2010 and dropped by 55 per cent to $362,980.

Mr Kusher said prices were still falling but at a more moderate pace’.

Gladstone (QLD)

Median house prices reached $475,000 in September 2012 and have dropped to $350,000. sales numbers halved.

The prospects arent too positive for Gladstone at the moment with transaction numbers still dropping according to Mr Kusher and no sign of an improvement in buyer demand just yet.

Kalgoorlie-Boulder (WA)

By June 2015 median house prices peaked at $351,250 and dropped 11 per cent to $312,000.

Mackay (QLD)
The highest median house price reached was $435,000 in June 2013 dropping to $345,000.

Roxby Downs (SA)

Median house prices hit $500,016 in November 2013 and had now halved to $250,000.