Tags: Affordability, House PricesMarket Update | 28.04.11

Successful Mining Causing Rent Prices to Skyrocket

The success of the mining industry in Australia is having an adverse affect on rental prices in some towns. The Courier Mail reports that it costs 9 times as much to live in a rural town of Dysart as it does to live in Brisbane! Additionally, mining areas are paying as much for property as you would for luxurious accommodations in popular areas, like Brisbane. For example, you can rent either a four bedroom, one bath, weatherboard home in central Queensland or a two level, four bedroom, three bath penthouse overlooking the gorgeous Brisbane skyline (complete with a balcony and roof top pool) for the same price of about $1450 a week.

According to The Real Estate Institute of Queensland, Dysart currently has the highest median rent of the state, at about $1200 a week for a house. As the mining industry provides massive wages in central Queensland, landlords are demanding $90,000 a year for modest homes. A four bedroom home in Dysart can demand as much as $1800 a week rent. Compare this to suburban homes in the south west of Brisbane, Forest Lake – where median rent prices are about $360 a week.

A dream come true for Queensland area landlords as their investmen returns reach nearly 15% a year – but there isn't even enough housing to provide for all the mine workers in the mining towns.

The Hot-Bedding Trend

Mining workers are often forced to split costs and housing for housing through “hot-bedding”. When there isn't enough housing for all the workers, and the prices are higher than they can afford to pay - many miners end up sharing rooms with people working opposite shifts, to help reduce the high costs of living. Some companies are flying workers in and out, a controversial trend, or putting their workers in temporary camps to live while they're working in the area which is reportedly causing social problems.

Living in Caravans

Young, non-miners living in mining areas like Moranbah are often living five or six people to a caravan, simply because they can't afford the skyrocketing rental prices. Teachers and government workers and others on lower salaries are forced to seek lower cost of living. The mining towns are losing long term residents who move out as the transient workers move in. When the population of transient workers, like miners, is bigger than the resident population, the services and resources designed to serve the community are stressed and may be inadequate.

Effecting More than Miners

The CFMEU, the union which represents coalminers in Australia, has been compaigning heavily for the destruction of mining communities through fly-in, fly-out operations. It's reportedly calling the escalating rent prices a disgrace, while the CFMEU secretary, Jim Valery, says it's affecting more than miners. People cannot move into these towns because they can't afford the rent – so there is a lack of council workers, banking staff, emergency workers and the like – who simply can't live in the mining areas due to an inability to pay the high rent prices.

Rental Shortage Across Australia

Across all of Australia, there is a shortage of available rental properties which is leading to an increase in rental prices. In many cases, it costs as much to rent a property as it does to purchase, depending on where you live. All areas experienced unit rent increases except for Brisbane and Hobart in 2011. It's predicted that rental prices will continue to climb throughout the year, due to accelerating economic activity, less people purchasing homes, and the overall housing shortage.

For more information on the best home loans in Australia.

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