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The coal industry will continue to grow over coming decades in terms of total supply required to meet global demand – that is fairly certain. What will vary is coal prices over the years, depending on the supply/demand equation (not unlike property). Australia, particularly central Queensland, has some of the best and most economic reserves in the world, and is ideally placed to supply the likes of Japan, Korea and India (China supplies most of its coking coal domestically).
What we are seeing at the moment is a boom period. What does that mean for properties? Supply is tight primarily due to the high influx of contractors, as well as an increase in mine employees to cover not only the increased production, but also the construction of the many expansion projects. The question to ask is what will the housing supply/demand look like once the large number of expansion projects are complete, and any production of high cost deposits are ramped down if (when…) the coal price comes down? The comforting point here is that the majority of the transit workers are accommodated in the single persons quarters/camps, not in houses.
The other thing of note regarding mining towns is the trend over the past 10 years to 12 hour shifts and a preference for people to keep their families near the coast – ie Mackay, Sarina etc.. In my view, this means that given the choice, people would be attracted to lower priced accommodation in the mining towns, allowing them to purchase/build larger family homes on the coast.
In summary, I think there will always be demand for more homes in mining towns, however the prices will rise and fall with more volatility than coastal or major centers. Although unlikely, it should be remembered that in the early 2000’s you could buy a 3 bedroom house for under $50k in these towns.
Not sure if this helps people, or just adds more complexity.
Personally, i would not be investing in mining towns at this point in time. That having been said, I remember a friend paying $250k for a house in Blackwater 3 years ago and thought he paid way too much. Just shows what I know…..
