- A booming resources industry is feeding into regional price rises in WA
- Seven of WA's nine regions experienced strong property growth in late 2020
- Port Hedland saw its house price rise 17% over 2020, as mining powered on
As reported yesterday, strong commodity prices and positive agricultural market settings have boosted the regional economy around the country.
This has fed into the regional property market, with commutable areas an hour or so from major cities experiencing significant interest.
Over in Western Australia, with iron ore prices averaging more than US$150/tonne (which had been stuck around US$60/tonne up until 2019), mining centres such as Port Hedland, Karratha and Kalgoorlie-Boulder are leading the property price upsurge.
Latest data from the Real Estate Institute of WA (REIWA) show that seven of the state’s nine regional centres experienced median house price growth during the last three months of 2020.
And it’s not only mining centres. Esperance, all the way down on the south, facing the Great Australian Bight (next stop Antarctica), saw its median house price rise to $343,000 in the December quarter, a rise of 9.3% since September, and 17% over the full 2020 year.
Esperance is a 700 kilometres south-east of Perth – so not really commutable – but it is a well known weekend haunt for Kalgoorlie miners, being just a 4-hour drive from the golden centre.
Gold prices have also been on the rise – uncertain times like pandemics tend to do that to the glistening metal – with an ounce selling for around US$1,800 today. That’s a 50 per cent rise on what it had been for most of 2016 to 2018.
Sales volume up in the regions
Five WA regional centres saw sales activity increase during the quarter, with reiwa.com data revealing Karratha and Geraldton were the standouts.
“Sales activity was up 15 per cent in Karratha and 12 per cent in Geraldton during the quarter. The other centres to record improvements were Port Hedland (up seven per cent), Albany (up four per cent) and Kalgoorlie-Boulder (up one per cent),” REIWA President Damian Collins said.
“Overall, the regional sales markets are showing strong signs of recovery, with mining sectors like Port Hedland and Karratha leading the way. This is in part due to the commitment by mining companies to keep their workers in WA as they continue to navigate the COVID-19 travel restrictions.
“REIWA members are also reporting they are hearing from a growing number of people seeking to escape the city for a sea change. With the fallout of COVID-19 changing how we do business; West Australians are increasingly able to work remotely and therefore have more freedom to choose where they want to live. It will be interesting to see whether this translates to longer-term regional population growth.”
Listings for rent declined in seven regional centres during the December 2020 quarter.
“Busselton and Bunbury saw the biggest reduction during the quarter, with listings down 36 per cent and 23 per cent respectively in these areas,” Mr Collins said.
reiwa.com data shows all nine regional centres recorded an increase in rent during the quarter.
“With fewer rentals available across regional WA, tenants were having to offer more weekly rent to secure a lease. Port Hedland and Karratha recorded the biggest quarterly increase in rent price, with their median rents up $55 to $550 per week and $50 to $700 per week respectively,” Mr Collins said.
“The decrease in rental stock across regional WA can be attributed to higher demand and subdued investor activity. Almost all regional WA markets are now in a state of undersupply, with vacancy rates at or below one per cent in many cases. Investors may want to consider regional WA as part of their investment portfolio, rather than just focusing on Perth.”
Table: Regional Sales and Rental Data, December Quarter 2020
|Regional Centre||Median House Price||Quarterly Change in Median Price||Annual Change in Median Price||Median Rent /week|