Housing construction in the town of Karratha may be at capacity, but it is not discouraging developers and property investors from heading north to find opportunities.
Housing construction in the town of Karratha may be at capacity, but it is not discouraging developers and property investors from heading north to find opportunities.
Perth-based construction company, Rapley Wilkinson, finished building 40 new homes for Burrup Fertilisers’ off-shoot Karratha Housing Pty Ltd six months ago and has since signed contracts with new clients for a total of 80 new homes in the town.
Regional housing has been at the core of Rapley Wilkinson’s business for the past 30 years and managing director Alan Thomas said the company had work until the end of 2007.
“We could have three times the amount of work if we were brave enough to take it on but we fear letting clients down and not delivering on our promises because we’d be overstretching,” Mr Thomas said.
Mining companies and property developers were desperate to have builders tender on projects, but have been increasingly turned down because there are not enough contractors in town to work on them, he said.
“I’ve told people the cold hard facts and they are that any new projects will struggle to get built. For us to take on anymore would just be sheer madness,” Mr Thomas told WA Business News.
Finding accommodation for contractors is one of the biggest challenges facing the town, a challenge that begins before they are even employed, with mining companies offering large sums to entice skilled workers away from the housing industry.
Mr Thomas said mining companies would continue to put upward pressure on housing prices until the volume of supply increased beyond demand, but it was difficult to see this point occurring when average homes were taking at least 30 months to build, instead of 16 weeks in a normal market.
At a time when builders are thin on the ground, the state government is releasing more land in an effort to reduce soaring property prices in the town.
It recently delivered 177 lots to market in its Tambrey estate in Nickol, and is expected to provide an additional 1,200 lots in staged releases of its Nickol West and Baynton West estates nearby.
Hoping to service some of the demand for semi-permanent accommodation in the town is listed property investment and management company Aspen Group.
Managing director Angelo Del Borrello said the company was looking at extensions to its existing 204-unit Balmoral accommodation park, and confirmed planning approval was pending on the addition of a further 62 two-bedroom cabins on the site.
A minimum stay of three months applies to the park and applications for periodic tenancies are required.
“It’s pretty busy up here and Aspen Parks fund is getting some good returns,” Mr Del Borrello said.
Also on the cards is an extension to its Pilbara Holiday Park, where a further 17 two-bedroom park homes will be added.
Pilbara Development Commission acting chief executive Lex McCulloch said the market was in a 12-to-18 month window of activity that would ease once land was released and more houses for rental accommodation were built.
“Probably the most difficult issue facing the town is the land/accommodation issue. Without land, you cannot build, but the question remains, where to put the builders,” Mr McCulloch said.
