Rebounding regional areas identified: Karratha, Derby and Moranbah

Regional towns Karratha, Derby and Moranbah are forecast to boom once again after undergoing price corrections following an unsustainable growth period, according to Crawford Property Group (CPG).

CPG group director Ryan Crawford says these three towns have all the elements of property markets under pressure.

“The recent correction means investors now have the opportunity to buy in low, maximise capital growth and still take advantage of yields of at least 8%.

“With commodity prices strengthening and the federal election having renewed investor and business confidence, we expect these markets to rebound strongly,” says Crawford.

Karratha, one of the largest towns in the north of Western Australia, is part of the WA government’s Pilbara Cities vision to increase the town’s resident population by 250% by 2035.

“Karratha’s house prices have remained flat over the last two quarters after a 20% retraction over the previous 12 months, indicating that the market is bottoming out.

“Increasing leasing activity has stabilised rents, and yields remain well above the national average at around 9% to 10%.

“With discounts available, investors have the opportunity to access these markets at low prices, generate instant income and maximise capital growth,” says Crawford.

Karratha will include Chevron’s $US52 billion Gorgon gas project, one of the world’s largest natural gas projects, which is currently under construction.

The expansion of Woodside’s Pluto LNG project from one train to two is also on the table.

“These two projects alone are expected to sustain housing demand over the long term as the resident workforce grows,” says Crawford.

Crawford says Derby, located in the Kimberley region of Western Australia, is one of the tightest property markets in Australia.

“It’s suffering chronic accommodation shortages, not only from flow effects of the commodities boom but from its unique role as a correctional and administrative centre.

“Derby has a historically low vacancy rate and investors have an attractive opportunity to secure a three to five year Western Australia Department of Housing lease.

“While new residential development has increased the supply of housing in Derby recently, the town is locked by tidal mud flats and Native Title which restricts the amount of land available for future development,” says Crawford.

Derby has four major mining projects planned for the area, totaling $1.6 billion and requiring more than 700 workers.

The median house price in Derby is $565,000, a 52.7% change in the past five years, according to RP Data.

Crawford says Moranbah, the number one mining town in Queensland, is expected to repeat its historical growth patterns as it reaches the end of its current cycle.

The major resource companies are moving ahead, spending more than $13 billion and creating more than 3,000 permanent jobs.

“The growing workforce and the town’s limited land availability due to surrounding mining leases, will once again increase pressure on housing supply.

“Investors can secure brand new homes with high tenant appeal at attractive prices ahead of the projected influx of workers.

“Well-located properties featuring a high quality finish are estimated to achieve positive cash flow returns of 8% per annum in today’s market,” says Crawford.

The median house price in Moranbah is $640,000, a 80.8% change in the past five years, according to RP Data.

Nicola Trotman

Nicola Trotman

With a penchant for the written word, Nicola has built a career doing just this – now Creative Director at thriving Melbourne-based PR agency, Greenpoint Media.

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