Australia's Residential Markets Plunge as Mining Boom Ends
CBRE reports that property prices in Australia's regional resource hubs have plunged by up to 74% over the past three years, as the market comes off its peak after riding the mining boom for more than a decade.
CBRE reports that western Australia's mining towns are now seeing the flipside of the cycle, as resource spending declines and transient populations relocate.
Residential markets in Queensland's mining towns have experienced the biggest drop in property prices, with some sales reflecting falls of 73.4% in Dysart and 70.6% in Moranbah over the past three years.
CBRE Senior Research Manager Sam Reilly said the Isaac region had been highly exposed to resource spending and was now seeing significant contraction as the market came off its peak.
"The boom period for Queensland's mining town house prices is over, and as investment spending continues to slow, demand for property has contracted significantly, resulting in substantial price volatility in these markets," Mr. Reilly said.
"Rental demand, previously fueled by resource employment has now fallen and plunging rental returns have seen capital values contract by more than 70% in some areas."
On the west coast, residential markets in the state's mining towns have also experienced a sharp tumble in property prices, with Karratha council area recording a 44% fall in prices since 2012 - including a 31% dive in the past year.
Mr. Reilly said the construction led jobs boom in Australia's resource rich areas had passed.
"$65 billion in mining projects across Australia have been completed over the past two years and have now transitioned to the export phase, which is far less labor intensive," Mr. Reilly explained.
"With commodity prices down 40% from 2012 levels, the chances of a rapid rebound in new resource projects is low, therefore, the residential markets in Australia's mining towns are unlikely to enter a new growth cycle over at least the medium term."