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Mining Town Karratha has Turned the Corner

28 September 2016
Property prices in Karratha have fallen 59.7% in the last three years, but lower prices and a more buoyant economy are generating solid sales and injecting life back into the mining town.

Data shows property prices in mining town Karratha remain in decline, but the word on the street is that the town is beginning to thrive again.

Karratha was one of the first towns to feel the effects of the mining downturn in 2012-13.

Just as the mining boom had caused property prices to surge higher, the downturn was just as powerful in sending prices lower, and the effects are still being felt today.

The average asking price for a Karratha house at the peak of the mining boom in late 2011 was nearly $900,000, according to the SQM Weekly Asking Price Index. The figure today is a third of that, at $300,000.

In the last three years, Karratha house prices have fallen 59.7%, according to SQM Research.
 

"It had been some time since I looked at the charts for this mining town so I wasn’t too sure what to expect," wrote Louis Christopher in the SQM Research Newsletter, wondering, "Perhaps it had finally bottomed out?"

Christopher saw the data showed prices were still falling.

But agents in the town paint a different picture. Alex Waters of Realmark - Karratha says average prices are now around $330,000. He said the market has picked up in the last two or three months, and where properties regularly sold for less than $200,000, there are now almost no properties available at that price point.

Waters, who moved from Sydney to Karratha after the boom, said the town is beginning to thrive again. Low rents are enabling small businesses to upsize and prosper, and continued strong mining activity is drawing workers to the town.

"The dynamic has shifted from fly in fly out workers to a much more residential feel," said Waters, adding "another 400 children have been enrolled in the local school."

Waters has seen an 18% increase in sales so far this year, compared with the same period last year, and says he has experienced similar rates of growth each year.

The outlook for the town is positive. Iron ore prices have ticked higher, and Rio Tinto still has huge mining operations in the area, explained Waters. Woodside is set to expand operations nearby, and there is a $500 million infrastructure spend underway in the town, including on a hospital and an arts centre. "The town is improving," said Waters.

Douglas Karunakaran, also an agent with Realmark - Karratha, says lower property prices mean it's now cheaper to buy in Karratha than it is to rent.

"Now prices are so low there are so many people wanting to buy," he said.

Good properties are attracting two or three interested parties, which is creating healthy competition, he said, "so prices are holding strong." 

Karunakaran said even properties that needed a bit of work were selling well.

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