The residential property market in regional Western Australia returned a mixed performance in the last quarter of 2007, with strong growth in mining towns and low or negative growth closer to Perth, according to the Real Estate Institute of Western Austra
The residential property market in regional Western Australia returned a mixed performance in the last quarter of 2007, with strong growth in mining towns and low or negative growth closer to Perth, according to the Real Estate Institute of Western Australia’s preliminary sales data for December.
Of the 10 regional areas studied, the top three performers – the Kimberley, Pilbara and Mid West – had a strong economic contribution from the mining sector.
In the Pilbara, Karratha’s median price hit $710,000, up 7 per cent in the quarter and 29 per cent for the year.
Fellow mining town Port Hedland also posted strong growth, up 15 per cent in the quarter to a median price of $556,000.
This was the biggest annual increase of any regional area, up 32 per cent from 2006.
Resort town Broome achieved a median price of $740,000 in the final quarter of 2007, which was only slightly up from the previous quarter but represented an increase of 25 per cent for the year.
REIWA policy director Stewart Darby said the northern regions would continue to perform well, although some of the rates of growth were not sustainable.
“Kalgoorlie, Karratha and Port Hedland have all been in a strong growth phase, which is really due to supply and demand in those areas. Finding tradespeople to build is the main issue, and rents remain tight,” Mr Darby said.
Further south, Kalgoorlie’s median house price was up 13.5 per cent in the quarter, to $312,000, translating to annual growth of 21 per cent.
However, Esperance had a lacklustre year, with the median house price falling to $365,000 in the December quarter, down 4 per cent from the same period in 2006.
“Esperance had very strong growth in 2006, being pushed by (BHP’s) Ravensthorpe Nickel project, but there’s been a tailing off in activity,” Mr Darby said.
“It peaked in the March quarter of 2007, at $382,000, but since then it’s fallen.”
Geraldton has also struggled to match previously strong growth, with the median price flatlining for the last three quarters (at about $350,000).
However, Mr Darby said he expected a rapid turnaround if the region’s iron ore projects came on-line.
“Should the Oakajee project get going, you’ll really see a stimulus there,” he said.
The state’s biggest regional markets – Mandurah and Bunbury – have both been in decline, with the former’s median price falling in the past three quarters.
“Perth, Mandurah and greater Bunbury have really been affected by strong land development activity and an overbuild,” Mr Darby said.
“But land supply and building approvals are coming off, so you’d think in the latter part of this year, or early next year, the market will be finding some equilibrium.”
Mr Darby said while there would be a correction in built supply, housing affordability remained an issue.
“WA is in a positive supply situation, but affordability issues are continuing, and that could stymie further development,” he said.
Underpinned by the Albany market, the Great Southern also performed well in 2007, achieving median price growth of 21.3 per cent for the year.
The Albany urban area was up 17.1 per cent, to $410,000.