From CoreLogic’s latest Property Pulse comes an interesting analysis of the property crash playing-out across Australia’s mining towns:
Research undertaken by CoreLogic research analyst Cameron Kusher provides a snapshot of just what’s been going in this sector in terms of the volume and median price of sales across these regions.
Mr Kusher said, “The smaller mining townships which don’t act as major service centres have tended to see a much sharper fall in median selling prices than the larger townships. The decline in sales and prices from the market peaks has been substantial across all of these regions, however the regions that have seen the most significant downturn were those that also recorded a significant upswing in prices and turnover rates prior to the peak in commodity prices.”
Mr Kusher’s mining towns research shows that most of the mining towns (listed below) have experienced a stabilisation in sales with some regions seeing an increase in sales volumes.
He said, “Although sales may have broken the declining trend in a number of areas, median selling prices are generally continuing to trend lower across each of the regions highlighted. The improvement in transactional activity could potentially be due to larger numbers of distressed sales moving through these markets, but may also be attributable to a cautious return of buyers seeking out a bargain.”
“The challenge for many of these regions is that despite an uptick in commodity prices recently, investment in large infrastructure projects such as new mines, processing facilities and transport has dried up and subsequently few additional jobs are being created.”
“Although commodity prices have recently surged, particular iron ore, coking coal and thermal coal, it is not yet leading to a substantial increase in exploration activity or employment, subsequently housing demand remains weak and continues to have a dampening effect on housing prices.”
Key Mining Area Activity Snapshot:
Port Hedland – median prices peaked at $925,000 in June 2013 and sales volumes peaked at 402 in July 2006. Current median prices are $390,000 (-58% lower than peak) and current sales are 128 (-68% below peak). In what may be a positive sign for the market, annual sales are once again trending higher, although the median prices trend is yet to bottom out.