Tentative Signs of Pickup in Mining Regions
There haven’t been many glimmers of hope for property owners in once-booming mining towns lately but an analysis released by CoreLogic yesterday may contain the first hints of an improvement since the end of the commodity boom.
In its latest Property Pulse report CoreLogic found evidence of an uptick in sales volumes across a number of hard-hit mining areas and, although prices are still in decline, analyst Cameron Kusher said there were signs this trend was slowing.
He said in heavily resource-dependent Port Hedland, median prices were still 67 per cent lower than during their mining boom peak, while in Karratha they were down 65 per cent and in Roxby Downs, 55 per cent. Sales volumes were down by 49 per cent in Port Hedland and 44 per cent in Karratha compared with 83 per cent in Roxby Downs.
In Queensland’s mine-dotted Isaac region, the median price is now just $140,000 (77 per cent down on the peak) while sales volumes remain 70 per cent lower.
It’s a slightly brighter picture in more diversified towns such as Mackay and Gladstone, where the price impact hasn’t been as great (down by 23 per cent 32 per cent respectively), but sales volumes are still 63 per cent down on their peak in Mackay and 68 per cent lower in Gladstone.
Mr Kusher said while these sales volumes were still well below their peaks, each of these markets had begun to see rises.
“While this result is unlikely to represent demand substantial enough to drive prices higher, it may be enough to slow or stop the declines in prices in the short to longer term,’’ he said.
“It’s also important to remember that it’s not as if there is no demand for housing in these towns, it’s just substantially lower than it was during the mining boom.
“Anyone looking to purchase now is securing a property at a substantial discount from previous highs, however, these towns also continue to achieve some of the best rental returns based on current pricing and rents.’’
He said while there was very little prospect of capital growth, investors looking for a more passive investment may be responsible for the recent upturn in buyer interest.
The weekly wrap from CoreLogic
- Auction activity is set to increase again this week with 2619 auctions scheduled; 1222 in Melbourne and 1003 in Sydney. This represents a 36% increase in auction activity over the same period last year
- The combined capital city clearance rate last week remained steady at 72.8%, down from 73%, with a slight rise recorded in Sydney to (to 74.5%) offset by a slight fall in Melbourne (to 75%)
- The highest clearance rate for Sydney was on the Northern Beaches (84.9%) followed by the Inner West (81.4%) and Northern Sydney (80%)
- In Melbourne, the stand-out result was in the West where the clearance rate was 84.1%, followed by the North-West with 81.3%
- Geelong again topped the non-capital markets with its clearance rate of 74.5%