The latest real estate situation on the Pilbara region in Western Australia's north-west shows downturn with the average advertised house sale price in Port Hedland, Australia's mining hot spot, sinking to its lowest since December 2006. Further north is Karratha, in which average advertised house sale prices too has fallen by more than 50 percent to its lowest in two years at $484,134 in September 2015 from its peak at $897,380 in March 2013, according to Domain.
Domain chief economist Dr. Andrew Wilson believed that the end of the mining boom has marked the start of a gloomy real estate market with prices going south statewide, including Perth and the north-west areas feeling a big hit in the current market shakeout.
He also said that while other parts of Australia are seeing big slumps following the end of the mining boom, such difficulty is further alleviated by their larger housing markets that are not heavily dependent on mining where in such case housing supply still has risen with new residential areas.
As for Pilbara, which is heavily dependent on mining, the limited supply in housing had been snatched early by the management companies and at the moment there is no motivation to raise housing inventory in the long term.
According to Dr. Wilson, "I think what occurred is because of the widespread notoriety of extraordinary well-publicized cases three or four years ago, of tin shacks getting a million dollars, we saw speculators move in and it wasn't really reflective of a natural housing market dynamic." Then he added, "It was more about a commodity that was scarce and spectators taking advantage of that."
According to Domain, Wilson describes the consequence as a "casino market" where in speculators are in for it based on what they could get but now that it is over they have no more place in the market.
