Change is under way in the Pilbara mining town of Newman, with BHP Billiton’s long-held dominance of the housing market moderating in the face of new residential developments and a growing rental sector.
Change is under way in the Pilbara mining town of Newman, with BHP Billiton’s long-held dominance of the housing market moderating in the face of new residential developments and a growing rental sector.
Rental and sale prices have softened as the market adjusts to increased supply, while BHP’s recent decision to make 170 positions redundant from its nearby Mount Whaleback mine has caused more people to look for alternative homes within the area.
Crawford Realty, Newman's largest real estate agency, claimed the changes had boosted activity.
General manager Janine Bailey said about half the BHP Mount Whaleback workers made redundant had been redeployed nearby and others were keen to remain in town for other reasons.
“(Employees) that have taken redundancies but can’t afford to buy their properties out are still looking to stay in town because the other partner continues to work in the area. These couples and families are now looking for rentals, so we’re seeing an increase in leasing enquiries as well,” Ms Bailey said.
Developer Megara director Matthew Pickford told Business News while increased choice had led to lower leasing and sale prices, Newman’s market was still attractive to investors.
“I wouldn’t say it’s a hot market, but it’s still a good market. You’re still looking at returns of over 8 per cent yield,” Mr Pickford said.
Ms Bailey said 98 per cent of the residential property Crawford Realty sold in Newman was to investors.
“The market as a whole in the Pilbara hasn’t been great as the mining development phase has shifted to the operational phase. However, Newman still offers above average rental yields to investors,” she said.
Mr Pickford said because of new options in the market, the pressure was on to renovate or rebuild older homes.
“We’re definitely seeing a flight to quality for all tenants in town, (people are) moving out of the 40-year-old houses and into new houses in better areas,” he said.
“(Older homes) are going to have to be rebuilt because you’re going to find that tenants almost won’t rent them at any price.”
Ms Bailey said BHP Billiton owned around 1,400 houses plus an additional 200 houses through its home ownership scheme in Newman, out of a total of around 3,000 houses in the town.
Mr Pickford said contractors moving to Newman to take up positions following redundancies could also have a big impact on the residential market.
“It may mean a lift in town, but I haven’t seen that happen yet,” he said.
