The Taroborah mine aims to have a locally employed workforce, which is great news for the local community.
However, this can also be a cause for concern in small communities where large mining projects take place. Residents may be concerned about what might happen to housing costs.
This is an understandable concern, so we thought it important to look into the state of the housing market in Emerald to see what the future might hold.
Current Property Market
At the time of the last census in 2011, there were 3,176 separate houses in Emerald. There were also 667 units or townhouses.
Additionally, in 2011, some 56.0 per cent of Emerald residents owned their dwelling (outright or through mortgage), compared to 63.5 per cent across Queensland generally.
That means we had to consider two different markets in our study — the market for homes or units to buy, and the market for properties to rent.
When we looked at house prices, we found the median house price in Emerald had risen from $340,000 in 2006 to $460,000 in 2012. That is a rise of 35 per cent in 6 years, although real prices have not risen as much because of inflation. Median unit prices rose 24.9 per cent in the same period, from $277,000 to $345,000.
So, housing prices had risen roughly 20.8% in real terms over this 6-year period.
But between March 2012 and February 2013, the price of both houses and units rose slightly before falling away.
The median house price had dropped to $425,000 in February this year, a fall of 7.8 per cent in 12 months. Median unit prices had fallen 16.9 per cent in the same time.
A survey of real estate agents bore this out. While there are many more houses currently available for sale in Emerald than a year ago, prices have reduced — with current averages for a three-bedroom house and land package at $400,000.
The more important question though is how affordable these houses are.
A traditional concern for many regional communities is the impact of additional and well-remunerated mining industry workers on housing affordability. By tracking median house prices against wages and salary information, a housing affordability index can be generated for Emerald, which can be compared with other mining and non-mining Queensland communities.
The results show that while house prices in Emerald are robust, they remain affordable compared to nearby towns and major cities when expressed as a multiple of mean income.
Pleasingly, the index shows that houses in Emerald are 16.2 per cent more affordable than houses in Moranbah, 25.8 per cent more affordable than houses in Townsville, and 34.2 per cent more affordable than houses in Brisbane.
Lower house prices also lead to lower rental costs. In mid-2011, there were one or two rentals available at most in Emerald; currently there are more than 24. Typically, a four-bedroom rental house that was attracting $700 per week is now advertised for $560.
Future House Prices
The most interesting finding from our study related to the future.
In addition to many existing houses coming onto the market as a result of the mining industry downturn, there is an abundance of developed land and ‘house and land’ packages available in new estates such as Mayfair Ridge with 500 lots and Highfields with 1,000 lots.
In the 12 months to 30 September 2012, there were 432 dwelling units in new residential buildings approved in the Central Highlands local government area, 300 of which were in Emerald.
Our study shows that there is currently development approval for an additional 2,066 lots or apartments which have not yet been built (in addition to 600 beds in short-term accommodation). That represents an increase of 53.8 per cent in the total number of dwellings over 2011 housing stock.
With the resident population being 13,576 in 2011, and only forecast to rise at 3 per cent per annum, we believe there is significant room for additional population growth without seeing any increase in housing prices.
In fact, without new people coming to the town, housing prices may continue to fall for some time.