Mining in Australia has been big business since the first colonies. This past year, however, mining investment has hit a slump and so demand for housing in mining areas has also ground to a halt.
Across the board, it seems some mining towns have escaped the downturn in housing prices. Let’s jump in and look at some annual median prices and sales volume figures for each town.
According to CoreLogic, the median prices in Port Hedland peaked at around $925,000 in June 2013, whilst sales volumes peaked at 402 in July 2006. Currently the median price is sat at $390,000, which is a 58% fall on three years ago. Sales are down 68% from 402 to 128. It should be noted, however, that sales are on an upward trend, but the median price is yet to hit a positive level.
In 2012, prices peaked in Isaac at around $620,000. Sales peaked at 661 in March 2012. It’s currently estimated that median prices are around $140,000, which is a 78% decrease from the peak price. Sales are also down by 28%, to 117. It’s been noted that the number of transactions in the area have risen, but the price trend remains on a negative slant.
The median prices in Karratha peaked at around %815,000 in 2010. Sales volume hit 511 in March 2005. At present the median price sits around $360,000 and sales are at 235. This is a 55% decrease in price and 54% decrease in sales respectively. Like Isaac, the sales numbers have crept up slightly but median sale price is still falling.
Gladstone saw median prices peak at $475,000 in 2012 and sales volumes hitting 1,823 in 2007. Currently the median price is $350,000 – a 26% lower figure than in 2012. Sales volume sits at 572, recording a 69% decrease. There is a low demand for housing in this area with no trend to suggest it will increase in the short-term.
In June 2015 prices peaked at $351,250 with sales volume peaking at 1,656 in September. Current median prices are $312,000 (-11% lower than 2015) and current sales are 345 (-79% below peak). There is no sign of any upward trend in sale pricing, but transactions have levelled out.
Median prices hit $435,000 in June 2013 whilst sales volumes peaked at 3,264 in April 2004. The current prices are sat at $345,000 (-21% lower than peak) and current sales are 1,045 (-68% under peak). Housing transactions have recently levelled across the Mackay housing market but are yet to pick up.
The median prices peaked at $500,016 in 2013 and sales volumes subsequently hit 187 in 2004. Currently the median price is $250,000 (-50% lower than peak) whilst current sales are 23 (-88% below peak). Transaction numbers have recently begun to climb an upward trend.
As we might expect, the smaller mining towns have hit a much sharper fall in their median selling prices; especially when compared to the larger mining towns. It is also worth noting that in virtually all cases there has been a decline in housing sales. The regions hit hardest by this were those whose prices rose sharply, with turnover rates also rising before the peak in commodity pricing.
All mining towns detailed above have seen their sales figures find balance once more, with some regions recording an increase. Despite this upward trend in some regions, sale pricing remains low and in most cases, is on a negative trend. The upward trend in sales could be due to distressed sales in these market areas, yet experts believe it could also be due to returning buyers looking for a bargain property.
These regions all face a challenging time ahead, despite a recent rise in their commodity prices. Unfortunately, investment in large infrastructure projects such as new mines, transport etc., has ground to a halt – meaning that few additional jobs have been created.
Although the price of iron ore, coking oil and thermal coals have risen, it hasn’t yet led to an increase in exploration activity. This has caused the housing market to remain weak in mine town areas across the country.