Mining brings WA property market back to life
Many investors in regional Western Australia are striking gold as house prices in mining towns surge due to increased demand.
The Real Estate Institute of Western Australia (REIWA) has reported record highs for Port Hedland, recording a median house sale price of $430,500, up 44.7 per cent from the previous year, making it the best-performing regional market in the state for 2021.
In addition, it recorded a 6.3 per cent increase in median house sale price for the December quarter, gaining the prestige of being the best-performing regional centre for that period.
REIWA deputy president Joe White has attributed the price growth to two forces: the resurgence of Western Australia’s mining industry and the Western Australian government’s voluntary buy-back scheme.
“The desire of mining companies to have a more localised workforce has had a big impact on the number of people looking to buy houses in Port Hedland, which has created more competition and driven up prices,” explained Mr White.
Meanwhile, the buy-back scheme is part of the Western Australian government’s initiative to buy out residents of the historic part of town to minimise the number of people living near the dust-polluted port.
According to Mr White, the scheme “gave residents the option to sell their property for a government-guaranteed market price”.
These developments provided an opportunity for the region to pivot from the slump it experienced when borders closed.
“Pilbara was one of the hardest-hit places in the state for house prices during the downturn. House values plummeted and a lot of people experienced financial hardship as a result,” Mr White said.
Port Hedland has retained a healthy median house sale price of $542,000, which is 54 per cent lower than its 2013 peak of $926,000, despite the robust annual price growth.
Mr White is optimistic that the local market will gain further strength in the coming months: “Whilst we have seen significant price growth in Port Hedland over the last year, there is a way to go to reach the heights of 2013 and a lot of price growth still to be had.”
Other WA regional centres
In 2021, all nine regional centres saw an increase in median house sale prices, with six seeing an increase in the December 2021 quarter and three seeing no change.
Among the nine regional centres, Geraldton and Broome were the year’s second- and third-best performers. Geraldton saw a median house sale price rise of 22.8 per cent to $356,000, and Broome saw a rise of 17.6 per cent to $600,000.
The substantial price growth in Geraldton and Broome can be attributed to a change in lifestyle, according to REIWA’s deputy president.
“Local agents on the ground in Geraldton and Broome have said a combination of the tourist boom and strong demand for rentals has seen an increasing number of people purchase property in these areas leading to a surge in prices,” said Mr White.
He projected an increase in the number of people drawn to the regions for the lifestyle possibilities and added security they offer, especially with Western Australia’s stringent border restrictions during the pandemic that has kept COVID-19 at bay.
More from this writer:
-
Construction costs reach highest level since GST implementation
-
10 economic powerhouses boasting strong property markets
-
20 Perth suburbs with the most impressive turnarounds post-pandemic
-
Mixed bag for home values as Australia shifts to multi-speed market
-
The basic principles that can become a 31-property portfolio
-
Most expensive and most affordable rental suburbs in Australia’s capital cities
-
What’s the likely outcome of a cash rate hike for investors?