Here's what a commodity super-cycle does to property prices in a small mining town

Ian Waldie/Getty Images

If you’ve ever wanted to know what a once-in-a-generation commodity super-cycle can do to property prices in a small mining region, we now know the answer, courtesy of CoreLogic.

The charts below looks at the median property price, along with overall sales volumes, of seven Australian mining towns over the past three decades.

We’ve broken it up into two parts to make it easier on the eyes.

Here’s Port Hedland, Isaac, Karratha and Gladstone:

And here’s Kalgoorlie-Boulder, Mackay and Roxby Downs:

While those who bought a long time ago are still well ahead, those who bought at the peak of the mining infrastructure boom a few years ago have just experienced, first-hand, what a boom-bust cycle feels like.

Here’s the decline in the median property price from the peak earlier this decade, along with the current median property price:

  • Isaac, Queensland 78%, $138,390
  • Port Hedland, Western Australia 58%, $390,000
  • Karratha, Western Australia 55%, $362,980
  • Roxby Downs, South Australia 50%, $250,000
  • Gladstone, Queensland 26%, $350,000
  • Mackay, Queensland, 21%, $345,000
  • Kalgoorlie-Boulder, Western Australia 11%, $312,000

They’re big losses for anyone who bought a few years ago, whether realised or unrealised.

And that’s unlikely to change anytime soon, according to Cameron Kusher, research analyst at CoreLogic.

“The challenge for many of these regions is that despite an uptick in commodity prices recently, investment in large infrastructure projects such as new mines, processing facilities and transport has dried up and subsequently few additional jobs are being created,” says Kusher.

“Although commodity prices have recently surged, particular iron ore, coking coal and thermal coal, it is not yet leading to a substantial increase in exploration activity or employment, subsequently housing demand remains weak and continues to have a dampening effect on housing prices.”

While transaction volumes have recently picked up in some regions, potentially pointing to a bottoming in prices, Kusher believes while it could be “attributable to a cautious return of buyers seeking out a bargain”, it could also be due to “larger numbers of distressed sales moving through these markets”.

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