Sydney and Melbourne prices may have begun to plummet but they would have to fall considerably further to be anywhere close to the largest in the country.
Sales data from the past five years has revealed Australia’s biggest real estate money pits remain concentrated in regional areas and are thousands of kilometres from the nation’s capitals.
Western Australian resource towns had the biggest drops in home values since 2013, with prices falling by up to $875,000 in some areas.
The towns with the biggest price drops included Newman in the iron ore rich Pilbara region in the northwest of WA and Derby in the Kimberley region.
Median house prices in these areas more than halved over the five-year period, shrinking from over $600,000 to under $200,000, the CoreLogic data showed.
Homes in WA mining towns were affected by the end of the mining boom. Picture: AFP Photo/BHP Billiton
Even bigger losses were recorded in the WA coastal hub of Port Hedland and sister town South Hedland.
The typical value of a home in the port 1523km north of Perth was $1.27 million in 2013 but has since shrank to about $395,000.
South Hedland houses had a median price of $865,000 in 2013. Now the median is $195,000.
By contrast, house prices in Sydney’s worst performing suburb — inner west suburb Annandale — fell 2.9 per cent over the five years, with the median unit price shifting from $770,000 to $747,500.
International shifts in demand for iron ore were partly behind the falling values in resource towns, but a growing trend of fly-in, fly-out workers also depleted demand for the local homes.
Property prices and rents were further impacted by the rise of mining camps for local workers that bypassed the local housing markets of some mining communities.
Many of the camps were constructed by mining companies precisely because local rents and home prices had been skyrocketing, making the usually high cost of construction worth the investment.
Falling home values have dealt a particularly devastating blow to property investors who bought into resource towns during the height of the mining boom.
The owners of a four-bedroom house on Port Hedland’s Styles Rd have been trying to offload their property since 2013, but even after slashing more than $500,000 off the price have still been unable to sell.
They bought the property for $1.08 million in 2008. If they sold for their current listing price of $749,000 they would still lose $331,000.
The tense sales environment has evaporated real estate empires seemingly overnight.
Property investor Ryan Crawford had amassed 40 properties spread mostly across the Pilbara region by 2013, which he reported at the time as having a combined value of $32 million-plus.
Much of his property portfolio has since been foreclosed by banks, according to the West Australian. Part of the Crawford property empire was sold at a fraction of the buying prices, with documents filed in the Supreme Court in 2017 showing the proceeds fell short of what was owed.
This article was first published in www.realestate.com.au. Here is the link to the original article.