Hundreds of dwellings to be built in the Pilbara
Further residential development has been announced for Port Hedland with hundreds of new home sites and multiple storey dwellings to be built.
Under the Pilbara Cities initiative from the Western Australia state government, land minister Brendon Grylls has indicated that a new estate will be built providing a range of lot sizes.
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“Similar in size to the successful Pretty Pool estate developed by LandCorp, the land is part of the residential expansion area identified in the Pilbara Port City Growth Plan,” Mr Grylls said.
“When fully developed, this estate could provide up to 300 residential home sites as well as several sites for the construction of multiple dwellings up to three storeys.”
Location researcher and director for buyer's agency wHeregroup, Todd Hunter, told Smart Property Investment that investors shouldn’t be too nervous about any land releases at the moment but should be keeping a close eye on developments going forward.
“I don’t know if there’s going to be a huge effect straight away. There’s definitely going to be a negative effect in terms of supply and the rents will lower, and the same with property prices, but demand there absolutely astronomical so the effect will be minor,” Mr Hunter explained.
Port Hedland's rental yield for units and houses sits at nine per cent (RP Data) with a median price of $895,000 and $1,152,500 respectively.
“It’s more a case of ‘will they release more?’ Are there more and more of this type of release coming? It’s the flow on effect, I’d be more scared about what’s next,” he said.
Positive Real Estate’s CEO, Sam Saggers, also explained to Smart Property Investment that land releases can signal a greater change in an area, and are not necessarily one-offs.
“The pressure in these areas has been immense and isn't sustainable unless new land is released,” he said.
“Investors in these areas should lock in their equity and their spectacular gains that they have made over the last decade, as the market may have finally reached its ceiling and will soon become flat.
"New housing usually means stability or downward pressure on older inferior housing and rents. Times are changing.”
More land is, however, vital for these towns to ease run away housing prices for locals and ease pressure on rents, Mr Saggers said, with a vacancy rate currently at 0.6 per cent (SQM Research).
“The Pilbara is going to see more land corridors open up, so investors will need to adapt their strategy," he said, explaing that Landcorp are not the only major development company with plans for the area, with Mirvac looking at a 2,000 lot release in the region.
In South Hedland, Mr Grylls also announced that a development is to be expected in the form of a new hotel.
“The landmark high quality multi-level hotel development will revitalise the South Hedland town centre by activating Colebatch Way and incorporating retail space at street level,” said Mr Grylls.
This will be located directly opposite South Hedland’s new town square.
