LIKE the resources sector it so heavily relies on, the Kalgoorlie residential property market has seen its share of highs and lows during the past decade.
LIKE the resources sector it so heavily relies on, the Kalgoorlie residential property market has seen its share of highs and lows during the past decade.
From 1993 to 1998, the local market was enjoying a golden era during which property values, rental rates and turnover were all high.
But all good things must end and, when the resources sector went into decline, the property market followed. Property values plummeted and rental vacancies soared almost overnight.
However, after a turbulent three years, the market has steadied and local real estate agents are now confident of its recovery.
The global downturn in the resources sector hit the Goldfields hard, with job cuts and company relocations forcing many people out of the region in search of employment.
The population exodus, combined with the lack of people moving into the region, started a chain reaction, flooding the property market with vacant houses waiting to be sold or let.
LJ Hooker Kalgoorlie principal Allan Kunman said this resulted in an “unbelievable” rental vacancy which, during the market’s darkest period in 1998-1999, skyrocketed to an unbelievable 20 per cent.
“As people left, there wasn’t the influx of people looking to buy new houses, so those people leaving couldn’t sell their houses ... so they put them on the rental market as an alternative,” Mr Kunman said. “But then the rental market ended up flooded and, in 1998-1999, the vacancy rate climbed to as high as 20 per cent.
“And as people tried to let their houses, the average rents dropped from between $250 and $280 a week down to $190 to $200 a week.”
This, in turn, had a flow-on effect on the amount of property investment in the town.
“Kalgoorlie had always been good for property investment because capital growth, good rental rates and a relatively low rental vacancy rate meant returns were sometimes as high as 10 per cent,” he said.
“But then when the rental rates dropped, property investment became much less attractive, so investment slowed down as well.”
Brown James and Associates sales manager Brian Osmetti agreed there was little investment in the town and noted that many transient workers who came to Kalgoorlie preferred to sink their money into Perth property.
“With the Government Employees Housing Allowance there is no reason for teachers and policemen and the like to buy a house out here,” Mr Osmetti said.
“They buy a house in Perth and rent it out.”
However, the market was showing signs of improvement, particularly in the past two quarters, he said.
“Six months ago it was a lot quieter than it is now ... however I still have a lot of confidence in the region, things will come back on board,” Mr Osmetti said.
“All the real estate firms are selling between 25 and 30 houses a month and there are a lot of plans for the region over the next five years.”
Real Estate Institute of
WA Kalgoorlie branch chairman Gavin Gilmore said the market had improved quite significantly in the past six months.
“There is a steadily increasing volume of sales and we have a reasonably significant shortage of quality leasings, which has not been apparent for a few years,” he said.
Local real estate agents estimate the vacancy rate has now dropped to between five and 7 per cent, although rental rates have yet to increase.
Mr Kunman said the vacancy rate had dropped because the low rents meant people previously living in share-house, boarding or caravan accommodation were able to afford to move into a unit.
Mr Gilmore pointed to a recovering building industry, boosted by the external factors of low interest rates and the first homebuyers’ grant, as a sign of an improved market.
A campaign by the Goldfields Esperance Development Commission to attract professionals to the region also may benefit the market.
Titled ‘Are You Worth Your Weight in Gold?’, the marketing program highlights the benefits of living in the Goldfields and Esperance and will be run in different regions around the State.
However, local agents are doubtful that the property market will ever again reach the highs of the mid-90s.
“What we saw in the mid-90s was the construction of three nickel mines and quite a bit of infrastructure,” John Mathew & Sons principal Allan Pendal said.
“We had a uniquely inflated market with inflated prices, upward pressure on rentals and a high turnover of property.
“It is very unlikely that we will see those conditions again. I would best describe the market now as back to normal.”
From 1993 to 1998, the local market was enjoying a golden era during which property values, rental rates and turnover were all high.
But all good things must end and, when the resources sector went into decline, the property market followed. Property values plummeted and rental vacancies soared almost overnight.
However, after a turbulent three years, the market has steadied and local real estate agents are now confident of its recovery.
The global downturn in the resources sector hit the Goldfields hard, with job cuts and company relocations forcing many people out of the region in search of employment.
The population exodus, combined with the lack of people moving into the region, started a chain reaction, flooding the property market with vacant houses waiting to be sold or let.
LJ Hooker Kalgoorlie principal Allan Kunman said this resulted in an “unbelievable” rental vacancy which, during the market’s darkest period in 1998-1999, skyrocketed to an unbelievable 20 per cent.
“As people left, there wasn’t the influx of people looking to buy new houses, so those people leaving couldn’t sell their houses ... so they put them on the rental market as an alternative,” Mr Kunman said. “But then the rental market ended up flooded and, in 1998-1999, the vacancy rate climbed to as high as 20 per cent.
“And as people tried to let their houses, the average rents dropped from between $250 and $280 a week down to $190 to $200 a week.”
This, in turn, had a flow-on effect on the amount of property investment in the town.
“Kalgoorlie had always been good for property investment because capital growth, good rental rates and a relatively low rental vacancy rate meant returns were sometimes as high as 10 per cent,” he said.
“But then when the rental rates dropped, property investment became much less attractive, so investment slowed down as well.”
Brown James and Associates sales manager Brian Osmetti agreed there was little investment in the town and noted that many transient workers who came to Kalgoorlie preferred to sink their money into Perth property.
“With the Government Employees Housing Allowance there is no reason for teachers and policemen and the like to buy a house out here,” Mr Osmetti said.
“They buy a house in Perth and rent it out.”
However, the market was showing signs of improvement, particularly in the past two quarters, he said.
“Six months ago it was a lot quieter than it is now ... however I still have a lot of confidence in the region, things will come back on board,” Mr Osmetti said.
“All the real estate firms are selling between 25 and 30 houses a month and there are a lot of plans for the region over the next five years.”
Real Estate Institute of
WA Kalgoorlie branch chairman Gavin Gilmore said the market had improved quite significantly in the past six months.
“There is a steadily increasing volume of sales and we have a reasonably significant shortage of quality leasings, which has not been apparent for a few years,” he said.
Local real estate agents estimate the vacancy rate has now dropped to between five and 7 per cent, although rental rates have yet to increase.
Mr Kunman said the vacancy rate had dropped because the low rents meant people previously living in share-house, boarding or caravan accommodation were able to afford to move into a unit.
Mr Gilmore pointed to a recovering building industry, boosted by the external factors of low interest rates and the first homebuyers’ grant, as a sign of an improved market.
A campaign by the Goldfields Esperance Development Commission to attract professionals to the region also may benefit the market.
Titled ‘Are You Worth Your Weight in Gold?’, the marketing program highlights the benefits of living in the Goldfields and Esperance and will be run in different regions around the State.
However, local agents are doubtful that the property market will ever again reach the highs of the mid-90s.
“What we saw in the mid-90s was the construction of three nickel mines and quite a bit of infrastructure,” John Mathew & Sons principal Allan Pendal said.
“We had a uniquely inflated market with inflated prices, upward pressure on rentals and a high turnover of property.
“It is very unlikely that we will see those conditions again. I would best describe the market now as back to normal.”
