Home prices in Australia’s mining towns are leading the recovery in the property market, accounting for nine out of the 10 suburbs with the strongest growth in median prices.
The gains were led by a suburb close to the home to one of the world’s largest lead smelters, as well as a once-struggling steel city, as record-low interest rates and an easing of bank-lending rules support demand.
“Mining towns are definitely having a moment,” REA Group Chief Economist Nerida Conisbee said.
Risdon Park South, a suburb of Port Pirie, the South Australian location of Nyrstar NV’s smelter, registered a 71 percent jump in median prices in the 12 months ended in August, according to
the latest data from Hometrack Australia.
A 42 percent jump in price was recorded in the state’s steel town Whyalla Norrie, where the median house price was A$138,000 ($94,500), and in the Queensland coal mining town of Blackwater, where prices surged 41 percent with 51 properties changing hands. Other mining centres in the top 10 include Newman, Quarry Hill and Dysart.
“Rental growth in many of these places has been strong for quite a while now,” Conisbee said. “It is now flowing through to pricing, likely driven by greater investor demand.”
Meanwhile in the capital cities, preliminary auction clearance rates were higher across lower volumes compared with the same period a year earlier.