A NEW report has revealed the extent of the property downturn in mining towns, with properties changing hands for a quarter of their purchase price in some centres.
CBRE's latest Australian ViewPoint shows that Queensland regions faced the worst of the downturn with sales in Dysart and Moranbah recording price slumps as high as 73.4 per cent and 70.6 per cent respectively.
The townships, in the Isaac region south west of Mackay, had been heavily exposed to the resource spending boom, says CBRE senior research manager Sam Reilly.
And he doesn't expect them to rebound any time soon.
"The boom period for Queensland's mining town house prices is over, and as investment spending continues to slow, demand for property has contracted significantly, resulting in substantial price volatility in these markets," says Reilly.
"Rental demand, previously fuelled by resource employment has now fallen and plunging rental returns have seen capital values contract by more than 70 per cent in some areas."
The Stressed Household Finance Report released by Digital Finance Analytics identifies six postcodes in the Mackay and Fitzroy regions among Australia's top 100 postcodes with households most likely to face mortgage stress.
West Australian mining towns haven't fared as badly, with prices in the Karratha council area falling 44 per cent since 2012. Most that occurred in the past year as prices slumped 31 per cent.
On the question of whether prices could begin to claw back any of those losses, Reilly remains pessimistic.
"The drivers of demand for residential property in remote mining towns are very narrow," he says.
"Although mining towns are best placed to experience rapid price growth when strong demand for resource commodities exists and new resource projects are being built, the downside risk to residential prices will always remain significant due to the almost sole reliance on mining operations and associated employment levels.
"While we would not rule out future property price increases over the longer term, especially in areas where new resource projects are announced, we do not expect any short to medium term recovery in commodity prices and therefore residential prices are expected to remain at current levels due mainly to subdued levels of rental demand."
Reilly says the construction-led jobs boom in Australia's resource-rich areas was fueled by $65 billion in mining projects.
"(Those) projects have been completed over the past two years and have now transitioned to the export phase, which is far less labour intensive.
"With commodity prices down 40 per cent from 2012 levels, the chances of a rapid rebound in new resource projects is low, therefore, the residential markets in Australia's mining towns are unlikely to enter a new growth cycle over at least the medium term."
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