22 Sep VIDEO – There is a crash in house prices in Australia
For buyers searching for a home in Australia’s mining towns, it is as though the nation’s unprecedented mining boom never happened. Median prices in key mining centres in Queensland and Western Australia have fallen to below the average price of more than a decade ago, wiping out the capital gains of the iron ore and coal-fuelled boom.
In central Queensland’s Mackay — a hub for the coal-rich Bowen Basin — the $330,000 median house price is cheaper than the 2006 price of $338,000, according to Core Logic figures published in The Australian. Across the nation in Port Hedland, the $267,000 median sale price for a house is less than 30 per cent of the 2013 peak price and two-thirds of the average price of a decade ago. The region of Roebourne, which takes in the Pilbara port city of Karratha, has reverted to an average price of $278,025, a low not seen since 2005.
Investment in Australia’s biggest boom since the gold rush started picking up in 2003, before dramatically kicking off housing demand from about 2006. BIS Oxford Economics chief economist Frank Gelber said the boom had expanded mining towns’ housing stocks to service the multi-billion-dollar investment phase. Gelber added that it was a wild ride on the upside and downside but the benefits to the community were temporary. He said housing oversupply lingered in the mining towns, and may never be filled.
There is always an upside I guess …. for locals, the downturn has meant a return to a stable market where residents can again afford to buy. Here is a bit more good news – in spite of languishing wage growth and household income-to-debt ratios hovering around 190 per cent, the percentage of home loans in arrears has stuck at 1.21 per cent for the last months of the current Standard and Poor’s Performance Index report.
The rate of arrears is currently sitting 0.9 per cent below the 10-year average of 1.30 per cent and in more good news, the dollar value of the amount dropped by around $30 million. So we are getting better at paying down those loans. The ratings agency said: “Despite the pressures of lower wage growth and high household debt, mortgage arrears have remained relatively low, buffered by low interest rates and stable employment conditions.