Regional markets on rise for owners

Tamra CarrThe West Australian
Home values have skyrocketed in Kalgoorlie.
Camera IconHome values have skyrocketed in Kalgoorlie. Credit: Supplied.

Rental yields for one Port Hedland landlord leapt $1300 to $2000 at the beginning of May; a $700 swing representing the gargantuan growth of the mining epicentre’s market.

Following 2013’s devastating 70 to 80 per cent plunge in property values, the Pilbara’s second largest town rebounded strongly in the March quarter, climbing a gratifying 9.4 per cent.

According to REIWA, Port Hedland outperformed every other regional centre in 2021’s first three months and has enjoyed a 39.1 per cent rise over the past year.

First National Real Estate Senior Residential Sales Consultant Danielle Mariu said it was clear good iron ore prices, historically low home values and a favourable supply and demand axis had created the perfect storm for property owners.

“Increased need for local homes and expiry of the rental moratorium has seen supply and demand push rents up quite significantly,” she said.

“This is a real issue for companies needing corporate homes for their employees and means multiple companies are fighting for well-presented houses.

“Hedland has a very strong workforce and mining sector which has not slowed down during the pandemic.

“Iron ore prices are the highest they have been in years and mining companies are doing everything they can to capitalise on this.

“So we needed extra accommodation locally to house families relocating to WA to service mining demands.”

According to Ms Mariu, Port Hedland rent returns are now among the highest in Australia, leaving residents wanting to buy homes with mortgage repayments half the cost of a comparable rental.

The whirlwind market conditions have seen an even split of owner-occupiers and investors purchasing property, particularly as rental yields become enough to substitute a wage for some families.

Ms Mariu said the upswing was likely to be maintained because the price of an established home was still well below the cost of building a new property, leaving current owners a better chance of recovering values lost in 2013.

Aside from Port Hedland, Esperance and Kalgoorlie-Boulder were other regional success stories on REIWA’s data sheet, with each experiencing 5.1 per cent growth in median price over the March quarter.

Residents of the southern seaside haven saw home values move 17.5 per cent, while homeowners near the Golden Mile had values jump 12.1 per cent.

Murphy Boyden Real Estate Principal and Auctioneer Margaret Boyden said Kalgoorlie in particular was thriving from affordable loan repayments and eastern states fly-in, fly-out workers looking to avoid pandemic-inspired isolation requirements by relocating.

Due to this movement, the Ms Boyden said her agency had signed 108 new leases over the March quarter and had seen multiple long-term tenants purchase their own homes.

She described the market as a dream for investors who were likely to reap rewards from steady growth, a booming mining industry and lending rates at less than three per cent.

“For example, a three-by-two duplex with an asking price of $330,000 leased at $440 per week is giving approximately a seven per cent return,” Ms Boyden said.

“Owners are enjoying a value increase that hasn’t been seen for some time, especially with increased wait times that come with government building incentives.

“It means those needing a family home now are purchasing established.

“Having lived in the Goldfields for more than 40 years, I believe Kalgoorlie-Boulder has always had affordable housing in proportion to wages and we are very lucky to have a strong infrastructure within the city making it very attractive to live.”

REIWA’s March quarter analysis also revealed a negligible 0.5 per cent decline in Karratha’s median home values, while average prices in Busselton remained unchanged.

The South West city has felt the brunt of the state’s housing shortage, with listing numbers tumbling 36 per cent when compared to the December quarter.

Bunbury and Albany also fell 26 and 25 per cent respectively between January and March, which has compounded an annual listings nosedive of 42 and 49 per cent.

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