Mining towns a hot investment

Whether it’s Queensland or Western Australia, mining towns are digging out much more than coal and gas. Property values are also being lifted, according to RP Data.

Research director Tim
Lawless says with all the hype around the resources sector, mining towns are
showing strong growth.

“There is a real boom with
the housing markets around the resource-intensive regions benefiting from
strong demand,” he says.

“As a result, this is
driving up transaction numbers and home prices.”

RP Data says high levels of
demand, coupled with scarcity of quality housing in some mining regions, is
showing that median house prices are actually higher than many of the most
prestigious suburbs in capital cities.

Western Australia’s
Roebourne, Port Hedland and Broome council areas have recorded the highest
median house prices outside of a capital city at $950,000, $775,000 and
$660,000 respectively over the year to June 2011.

In Queensland, Isaac
($445,000) and Gladstone ($415,000) are showing the highest median house prices
of any council region in the state, outside southeast Queensland.

Rental yields in mining
towns are also well in excess of capital city averages.

The rental return in Port
Hedland is 12.7 per cent, while Cloncurry in Queensland has a yield of 11.4 per

“With the non-rural
commodities sector gathering pace, resource-driven regions should continue to
prosper,” he says.

However, investors should
also be aware that mining towns are reliant on a single commodity.

“Any weakness in the
resources sector is likely to be reflected within the housing market,” Lawless

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