“There was a substantial jump in people coming to town at that time, and that flowed through into the rental market.”
South Hedland heads the regional Western Australian localities cheaper to buy than rent: RP Data
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The mining town of South Hedland is the leading town in WA where it’s cheaper to buy that rent, according to RP Data.
The data company's figures show that it can be $3,184 a month cheaper to buy a property with a principal and interest loan that it is to rent.
Agent Ryan Crawford from Crawford Realty says it’s been the case for a long time but rents have jumped noticeably in the last three months.
“There was a substantial jump in people coming to town at that time, and that flowed through into the rental market,” Crawford says.
He says the projects have been going on for a long time and are projected to last for some time into the future.
“They’re all long-term projects. There’s some interesting things happening with prices and China. Whilst that is a short-term thing that will fluctuate with global sector changes, the major effects are based on pricing. The commitments that mining companies like BHP and FMG have made will span 10 years plus.”
“Some have been put on hold. They’re just that – on hold."
Crawford says even though some projects have been put on hold the decisions haven’t had a large influence on the housing market.
“While people might see the postponements at taking large chunks out of the market, it’s not the case because the majority of work forces haven’t been bought on yet.”
Crawford is currently marketing 18 Lovell Place (architect's impression below), a block of eight units due to be finished next year.
Two of the units, priced at $599,000, have already sold.
The units are expected to rent at more than $1,300 a week, providing yields of 11.3%.
“The site is a fantastic option to get a low price unit in the market,” Crawford says.
Crawford says almost all interest in South Hedland comes from investors.
“It’s heavily investor based. Through our market it’s 90% investors. They come from the West Australian market, and there’s a lot of interest from the east coast and overseas.”