Mining town rental vacancies rising

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ScreenHunter_03 Jul. 23 09.31

By Leith van Onselen

From SQM Research comes news that rental vacancy rates remained broadly steady in March across the capital cities but have increased slightly over the year:

ScreenHunter_13 Apr. 18 14.03

SQM notes that rental vacancies in Canberra have risen strongly since July 2012, which may be associated with the large increase in apartment developments, together with federal government attempts to reduce the budget deficit (see my earlier post on Canberra).

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There has also been a notable increase in vacancy rates across Australia’s key mining regions, most notably:

  • Gladstone (QLD): 5.6%
  • Karratha (WA): 3.7%
  • Kalgoorlie (WA): 1.9%
  • Roma (QLD): 2.6%
  • Port Hedland (WA): 4.6%

According to SQM Research’s Managing Director, Louis Christopher:

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“We are now watching the data very closely on the various mining towns in the country. Property investors over the past ten years have done extraordinarily well if they held real estate in mining towns. However, there is always a risk that when a down turn arrives that these markets could have a very rapid and severe correction. We remind investors to remain very cautious when it comes to these towns.”

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.