The Pilbara mining region of Western Australia is arguably the most volatile property market in Australia, experiencing massive booms and busts as the iron ore market rises and falls.
After commodity prices collapsed in 2012:
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Asking rents for houses in Karratha fell by around 70% peak-to-trough, from around $1500 a week in late 2012 to around $420 a week:
It was a similar story in Port Hedland where asking rents for houses also fell by around 70% peak-to-trough, from around $1675 a week in late 2014 to around $500 a week:
Now with the iron ore market booming, rents across the Pilbara region are beginning to soar once more:
Domain rental data shows Port Hedland’s rents rose by 23.5 per cent between December 2019 and December 2020, making it the biggest rise across the state.
Karratha’s weekly rents rose by 16.7 per cent, seeing it make the top three areas of rises in the December quarter.
“Demand is intense to the point where it’s just gone crazy,” Milestone Realty Dalkeith Nedlands Jason van Straalen told Domain. “Demand outstrips supply by 10 to one.”
Mr van Straalen said rental prices had returned to boom times like those of 2012, with rentals now reaching thousands of dollars each week.
Expect the cycle to repeat when iron ore prices inevitably retreat.
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.
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