With property values surging across the country, it turns out even regional towns aren’t exempt from the housing price boom.
Karratha has surged to the top of the national leaderboard to record the country’s highest annual growth in housing prices.
The WA mining hub saw a 26.4 per cent increase in property prices over the past 12 months, narrowly topping Perth at 26 per cent and Kalgoorlie-Boulder at 23.1 per cent.
Real estate professionals in the Pilbara claim the rising costs are a result of a lack of housing supply and investors re-entering the market.
Realmark principal and selling director Jordan James said he first noticed a shift in the market in November continuing up until its peak in March.
“We probably noticed the biggest shift from November last year, when we started seeing investors re-enter our property market. It had been a long time since they actually entered,” he said.
“Prior to that, I would have said probably 90 per cent of our houses sold to owner-occupiers. But since then, I’ve seen that shift to more of like a 50/50 split, depending on the price point.
“In the last three weeks, we’ve had probably over 35 listings hit the market in Karratha, post Anzac Day, and that’s the most amount of listings I’ve seen hit the market in eight years of selling real estate, in such a small window.”
James said ultimately the higher demand on established properties is what has caused house prices to surge.
“I think investors re-entering the market plays a role, but ultimately it’s the fact that the rental market is so strong, the rental price is so high, that there’s just a lot of people that go, ‘You know what, we might as well just buy a property because it’s so expensive’,” he said.
“When you’re paying $1500 a week rent, it’s cheaper to just go and buy a property. So that adds to a massive demand issue.”
The current median value for a property in Karratha is $765,275. In comparison, the median price for a home in Perth is $1,038,344 and $802,805 in Albany.
Pilbara Real Estate investment property specialist Isabelle Stratford said she’s also noticed a change in investors opting into the property market again, but has also noticed more people choosing to move to Karratha for career changes.
“I would say it’s a mix of both, predominantly the amount of people who live here are in mining and the mining sector, and then any other industry which supports the mining,” she said.
“I would say we also see a lot of people who in the ages of 20 to 35 move here for career development, and also the ability to grow their own kind of wealth as well.”
As well as the lack of supply and demand for housing, Stratford said high building costs also add to the increase in housing prices.
“In the Pilbara, we have high building costs and transportation costs, so our wait times are longer when it comes to construction, and therefore it just pushes prices up of existing housing, because we are seeing the demand be so high in significance to the supply that we have,” she said.
As for why more people are opting to live in regional WA, Stratford believes it could be related to the cost-of-living crisis.
“You’re also subsidised a lot for living in a regional area, such as housing and other things in some circumstances. So I think that’s also a massive key driver for families,” she said.
“They might be seeing the higher wages in the regional area, and that it’s cheaper to enter the property market, so it could be definitely a key indicator.”
The ability to work a FIFO job without having to be away from family is also another incentive, according to James.
“There’s obviously just a lot of work as well, up in the Pilbara. I don’t think there’s many people that like doing FIFO anymore. So they go, well, let’s just relocate and be a family together,” he said.
“I see a lot of that. And having grown up with a FIFO dad, we did the same thing.”
But it’s not just Karratha that has seen a property price boom in regional WA.
Recent data from Cotality shows that out of the country’s 50 largest regional significant urban areas, Busselton recorded the strongest quarterly growth at the beginning of the year, rising by 7.5 per cent, followed by Albany at 7.2 per cent, Geraldton at 6.8 per cent and Bunbury at 5.8 per cent.
WA also dominated annual growth, with dwelling values in Kalgoorlie-Boulder rising by 23.1 per cent, followed by Bunbury at 22.3 per cent and Busselton at 22.0 per cent.
Cotality head of research for Australia Gerard Burg said the strength in the south-west of WA is “particularly notable”.
“Busselton’s growth is occurring despite it having a higher median value than Greater Perth, which suggests this performance is being driven by more than just affordability,” he said.
“We’re seeing a significant spillover of demand from the Perth market into nearby regional hubs.”
