Property prices in Australia’s regional resource hubs have dropped by up to 74 per cent over the past three years, new research has revealed.
According to a study by property multinational CBRE, mining towns are now seeing the flipside as the market comes off its peak after riding the mining boom for more than a decade, with resource spending declining and transient populations relocating.
Residential markets in Queensland’s mining towns have experienced the biggest price drop, with some sales reflecting falls of 73.4 per cent in Dysart and 70.6 per cent in Moranbah over the past three years.
CBRE senior research manager Sam Reilly said the Isaac region had been highly exposed to resource spending and was now seeing a significant decline.
“The boom period for Queensland’s mining town house prices is over, and as investment spending continues to slow, demand for property has contracted significantly, resulting in substantial price volatility in these markets,” he said.
“Rental demand, previously fuelled by resource employment, has now fallen and plunging rental returns have seen capital values contract by more than 70 per cent in some areas.”
Mining towns in Western Australia have also experienced a sharp tumble in property prices, with the Karratha council area recording a 44 per cent fall since 2012 – including a 31 per cent drop in the past year.
Mr Reilly said the construction-led jobs boom in Australia’s resource-rich areas had passed.
“$65 billion in mining projects across Australia have been completed over the past two years and have now transitioned to the export phase, which is far less labour intensive,” he said.
“With commodity prices down 40 per cent from 2012 levels, the chances of a rapid rebound in new resource projects is low. Therefore, the residential markets in Australia’s mining towns are unlikely to enter a new growth cycle over at least the medium term.”