An area in Western Australia has seen rents jump by more than $400 a week over the second half of 2012, according to the largest real estate company in the Pilbara region.
The suburb of Newman saw rent increasing to over $2,000 per week for a house, said CEO of Crawford Property Group, Ryan Crawford. He attributes this to a chronic shortage of rental properties.
Rents jumped from $1,769 to $2,212 due to “massive new investment in the local resources sector” pushing demand, Mr Crawford said of the December quarter results. This number is in excess of four times the weekly rental rate for Sydney, Melbourne or Brisbane.
“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,” he said.
“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.”
He said that the resurgence of the iron ore price in recent months may encourage major new investment, which will continue to put pressure on the rents and property values across Pilbara towns.
“For example, Rio Tinto has just 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 is just north of Karratha – an investment which will create some 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.”
Karratha is Crawford Property Group’s pinpointed hotspot “because weekly rents will begin to recover based on major new investment which will eventually include the new $4 billion Anketell Port. This deep water port will enable the area to become a major iron ore exporter over the coming years.”