Is now the time to take a punt on a mining town?
THEY are the areas that were hit the hardest by the end of the mining boom, but there are signs Queensland's regional property markets may be turning a corner.
The resources downturn saw property prices in some areas of the state slump by up to 60%, but there is evidence price declines are slowing and some areas are staging a comeback.
And with yesterday's announcement of Adani's Carmichael Mine project given the green light, it's being seen as a sign of the direction in which the coal industry is moving and giving hope for the future.
Areas like Mackay, Isaac and Gladstone have recorded significant falls in sale volumes and prices in recent years, but Corelogic research analyst Cameron Kusher said some of these regions were starting to see a lift in sale volumes and transactions.
Kusher said anyone looking to buy property in these regions now would secure a substantial discount from previous highs.
He said these towns also continued to achieve some of the best rental returns based on current pricing and rents.
"Rental yields are still really attractive," he said. "They're not what they were, but it's still really hard to find the yield you can get in some of those mining towns."
"For an astute investor looking for rental return not capital growth, it could be an all-right play if you're going hold it for 20 to 30 years."
The mining town of Dysart in the Isaac region saw a 10% increase in its median house price in just the three months to February 2017, which remains extremely affordable at just $77,000.
The median asking rent in the suburb is only $160 but the indicative gross rental yield is high at 10.8%.
In Gladstone Central, the median house price rose 4.8% to $330,000 in the three months to February 2017 according to the latest Corelogic figures.
The rental yield for a house in the city is 3.5%.
The median unit price in the city rose 22.9% in the year to February to $510,000.
Luke Curtis, a sales agent with Living Here Property Partners, said there were signs the market was improving in the areas of Moranbah, Mackay and Dysart.
"Having said that, prices have fallen dramatically and it's pretty easy to make a significant growth percentage-wise on something when you're buying for $120,000," Mr Curtis said.
He said a client bought 10 or 11 homes in Moranbah before the coal price went up late last year, recently flipped them and made a healthy profit.
"After a long period of price falls, watching this happen has been spectacular. Even if this is not the next boom, there will eventually be another one and it may even be as good as the last one."
But Moranbah Real Estate owner Bella Exposito is seeing a different story on the ground.
She said there was a slight pick-up in demand in January and February but the market had since slowed down again and she was having trouble selling and renting stock.
While many investors have taken a bath after having a punt on these areas during the mining boom, Kusher said the time might be right for some cautious optimism.
"As an investor in that market, you have to be a specific type," he said. "You have to go in with your eyes open to the fact capital growth is still a long way off."
Kusher said investors should be discerning about the type of investment property they chose.
He advises steering clear of older stock and instead choosing something modern or unique.
His pick would be Mackay or Gladstone as their economies are more diversified than some of the smaller mining towns.
Curtis agreed potential investors needed a long term plan, which provided for adverse conditions.
"That's where some people got caught out last time around," he said.
Moody's warned earlier this year that price declines in the country's mining regions had resulted in some mortgages in these areas falling into negative equity.
Kusher said it was hard to tell whether the recent uptick in transactions was a result of greater investor demand or forced sales.
Clinton Smith is one buyer who has taken advantage of Dysart's low housing prices, having recently purchased a number of properties in the small mining town.
"I'm a Mackay local, a property developer in Mackay, and I saw good opportunities out in Dysart," Mr Smith said.
"I started investing out there 12 months ago now and in that time I've acquired four properties.
"Return on investment is good at the moment, even at the bottom of the market, and with great signs in the mining industry as well as a major part of Dysart township itself, Norwich Park Mine, looking to reopen, you're buying at a perfect time with great prospects for future growth.
"The property market goes in cycles and we've seen the cycle of Mackay going up and then heading back down, it's opposite ends of the spectrum down south. The local market is showing great signs of coming back up.
"Towns like Moranbah and Dysart are predominantly mining-driven and with such strong prospects on that front, things can only look up."
He said the Adani mine alone was not such a major influence. "More stimulation to that industry isn't going to hurt, but Adani is not the be-all end-all of our mining positives," Mr Smith said.
"Even without it, there is great signs of recovery going forward, and rebuilding towns back to some of the heights we have seen previously.
"What we have now is the start of a cycle that happened 12 years ago, when there's a skills shortage at the mines, which in turn led to wages going up and that stimulates all the towns around as well as the major centres, because people are being paid more.
"We're seeing heavy movement in the market in Mackay and that will only follow in Dysart over the coming months."
Mr Smith said another skills shortage being generated now was only going to bring more people back to town.
"They are going to need to fill houses, that will affect supply and demand of rentals, it's just a repeat of what happened from 2005 onwards," he said.
"We're just at the beginnings of it now, and you should get into the market as soon as you can. The longer you wait, the dearer things are going to get.
"From an investment point of view, there's no better time than now to jump in. Get in before the prices go up."
Most recent sales
The most recent sales in Mackay region mining towns according to realestate.com.au were:
Three-bedroom house at 9 Gerrard St for $58,500 sold on June 5
Three-bedroom house at 9 Keats St for $180,000 sold on May 15
Three-bedroom house at 5 Wickham St for $165,000 sold on June 1