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ISCOVER
Staff Reporter
Australia’s commodity prices may have peaked, but properties in the resource rich regions continue to go from strength to strength according to one analyst.
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In the RP Data weekly Property Pulse, research analyst Cameron Kusher said mining activity accounted for 7.7 per cent of the country’s Gross Domestic Product.
“While this figure may not seem significant, the only other items that contributed a greater amount to overall GDP were from financial and insurance services at 9.8 per cent, ownership of dwellings at 8.0 per cent, and construction at 7.8 per cent.
“Despite the fact that mining accounts for 7.7 per cent of Australia’s economic growth, employment data from May 2012 shows that only 2.4 per cent of Australians are employed in mining.
“This number becomes higher when you consider services with links to mining, however, it is clear that the size of the workforce is not commensurate with the sectors current importance to economic growth,” Mr Kusher said.
A detailed look into the activity in mining regions over the past 12 months confirmed that a vast majority of these areas experienced an increase in median selling prices.
Topping the list and recording an impressive increase in median sales over the 12 month period at 30.7 per cent is the Isaac Council which takes in much of Queensland's Bowen Basin region.
In contrast, the Whitsunday region, which is home to the township of Bowen and Port Pirie, are the only two regions to record a decline in the median selling price.
Over the past 10 years all regions excluding Musswellbrook and Kalgoorlie/Boulder recorded average annual growth in median selling price exceeding 10 per cent per annum.
Once again, Isaac is the standout with median prices increasing at an average annual rate of 32.3 per cent.
“A lack of new housing supply has had an impact on rental rates which have seen robust growth over recent times.
“Rents have increased over the past year across each region except in Port Pirie and have risen by 88.2 per cent across the Isaac council region,” Mr Kusher said.
For the mining areas’ unit market, Mr Kusher said that there is typically a much lower supply of properties in these regions than there is for detached houses. While most of the council areas detailed recorded an increase in median house price over the year, median unit prices fell or were unchanged in 9 of the 14 regions detailed.
“Despite the typically sluggish growth in prices over the past year, most have seen strong increases over the past 10 years, albeit not typically as strong as the growth in house prices,” Mr Kusher said.
Unit rental rates recorded strong increases over the past 12 months across the regions. Mr Kusher said that this is likely due to the fact that unit rents are typically cheaper than those of detached houses.
“Many companies are becoming more conscious of the costs associated with housing mining workers; therefore units offer a much more affordable cost saving option for them.”
The data comes as BHP announced it will axe more than $50 billion worth of expansion projects, incluidng Olympic Dam and Port Hedland.
