Mine town home values could drop in wake of slump

THE full effects of the plummeting coal prices and subsequent job losses on the region's property market are yet to be felt, according to one senior valuer.

Herron Todd White Emerald manager Kerry Harrold said it was too early to tell what effect the fall in coal prices and subsequent job losses will have on the Highlands housing market.

THE full effects of the plummeting coal prices and subsequent job losses on the region's property market are yet to be felt, according to one senior valuer.

There are concerns property values in towns reliant on the mining sector could plummet in the wake of hundreds of job retrenchments.

However, Herron Todd White Emerald manager Kerry Harrold said it was too early to tell on the Highlands.

“It's only just happened,” he said yesterday.

“There seems to be plenty of sales of properties up to $400,000 but once you go over $400,000, the buyers are few.

“That's been the case since the global downturn started about 12 months ago, it's not just due to the job losses.

“Values fluctuate depending on the buoyancy of the mining sector and the employment in that sector.”

Despite some negativity in the market place, Mr Harrold is confident sales will remain stable.

“I would think values would soften before sales slow down.

“You look in the paper and there is still an abundance of jobs, just not in the mining industry.

“I think people are just going to have to accept lower wages in another industry.”

Property valuations have risen astoundingly in Bowen Basin mining towns over the past few years.

“In Dysart a house you could get six years ago for $40,000 is now worth $400,000,” the senior valuer said.

Mr Harrold added he's reluctant to call any reduction in prices a market correction.

“It's a supply and demand game and demand has been there,” he said.

“It's just a volatile market.

“Emerald's the most stable because it has other industries but places like Blackwater and Dysart are as volatile as anywhere.

“All we can do is wait and see at the moment to see if other mining companies will follow suit.”

But it's not all bad news. The low value of the Australian dollar makes local exports particularly attractive to overseas buyers. The mining sector retrenchments have also started to free up workers for positions that have been vacant for years.

Central Queensland property owner and commentator Neil Jenman agrees there is an upside.

“This is good news for people who haven't been able to by a house before,” he said.

Mr Jenman's predicted mining town house prices could fall by 30 per cent or more.

“If property prices drop 30 percent, owners would be lucky,” he added.

“I don't want to worry people unnecessarily but if you're buying in an area with one main industry and that mine closes, everything suffers.

“It's not just the miners but the influx of city property investors who'll be affected.

“A lot of them don't know what they're doing.

“They've pushed the prices up and now have a lot to lose.

“If you don't intend to sell, it doesn't matter if it drops in value.

“The people who'll be in trouble are the investors.”

Originally published as Mine town home values could drop in wake of slump