Surging rent prices in the Newman area of the Pilbara mining region in Western Australia suggest the area will continue to be a prime investment target in the year ahead, according to one group.
Ryan Crawford, CEO of Crawford Property Group, said that figures produced by the Pilbara Development Commission show that the average weekly rent for a home in Newman during the December quarter 2012 stood at $2,212, or more than four times the weekly rental rates for Sydney, Melbourne or Brisbane.
“Over the last six months of 2012, average weekly rents in Newman surged from $1,769 to $2,212 due to a chronic shortage of rental properties and rising demand for homes due massive new investment in the local resources sector.
“Crawford Property Group believes Newman will be one of the standout real estate markets in Australia during the coming year due to the rising rents and underlying capital values.
“Despite recent gloomy predictions about the end of the resources boom, other major regional centres in the Pilbara continued to show increases in weekly rents, although at a slower rate than previously.
“In Port Hedland, for example, average weekly rents increased by $177 to $2,301 during the second half of 2012, while in South Hedland average weekly rents rose by $91 to $1,843.”
According to Mr Crawford, the resurgence of the iron ore price in recent months will encourage major investment in the region.
“This will continue to put an upward pressure on weekly rents and property values in key Pilbara towns,” he said.
Mining company Rio Tinto has announced a $3 billion expansion of Nammuldi mine near Tom Price as well as the construction of a new 130 megawatt power station at Cape Lambert, which Mr Crawford claims will create 1,500 new jobs.
“In particular, this major new investment will have a very positive impact on the Karratha property market, which has seen a downward market correction in recent years with average weekly rents falling by around $200 during the second half of 2012.”