Port Augusta’s property market is set for a much needed shake-up, with low property prices, high rental yields and a growing resource sector to drive investor interest in the coming years.
Named one of 10 regional towns to watch by market research company Hotspotting, Port Augusta is the latest Eyre Peninsula town to benefit from a growing resource sector, which includes a number of hybrid renewable energy projects and the construction of a new commercial port, announced last week.
According to Hotspotting research director Terry Ryder, Port Augusta property prices, which flat lined in late 2016 following the closure of the Leigh Creek coal mine, were seeing the first glimpses of an upswing in almost 10 years.
Last year alone, the town reported a 2.17 per cent growth in house prices.
“Port Augusta’s property market experienced a major up-cycle for five years from 2003 to 2008, with four consecutive years in which the median house price grew more than 20 per cent,” he said.
“Since then the Port Augusta property market has struggled to maintain equilibrium and its long-term growth average is now in negative territory.
“However, a small glimmer of improvement has been recorded in the last three months; the median price has risen by $4000 from $144,000 to $148,000, though prices are still lower than they were years ago.
“That said, several factors are now working in Port Augusta’s favour … and it’s tipped to experience investment growth between 2018 and 2021.”
With a number of significant projects being targeted in and around Port Augusta, Mr Ryder said the town offered good opportunities for buyers seeking to capitalise on their investments.
“Affordability, strong yields, the potential behind planned resource projects and low vacancies are some of the reasons Port Augusta is worthy of consideration,” he said.
“While vacancies peaked at 6 per cent around May 2016, they have steadily fallen and are now at 2.4 per cent in postcode 5700.
“As such, the median rent of $250 will deliver a yield of 8.8 per cent, based on the current house price.”
Chief economist for realestate.com.au, Nerida Conisbee said Port Augusta was hot on the heels of Whyalla’s recovering property market, which experienced a surge in activity following businessman Sanjeev Gupta’s planned $600 million injection into the mining town.
“Port Augusta’s price growth over the past year has been fairly low at 0.4 per cent when compared to Whyalla’s 18 per cent,” Ms Consibee said.
“But despite that, Port Augusta has one of the highest median yields in the state which makes it a safe bet for investors.”
Real Estate Institute of South Australia president Brett Roenfeldt said he predicted exciting times ahead for the “iron triangle” which encompasses Port Augusta, Whyalla and Port Pirie.
“The reality is that when we look at figures, regional SA over the past few months had a price growth of 6.3 per cent,” he said.
“In comparison, metro Adelaide recorded, in excess, only 4 per cent, so the regions are outperforming the metro areas.
“If I had to take a punt, all the upcoming investment into the iron triangle will bring some pretty substantial growth with the regions outperforming metro Adelaide for some time to come.”
AT A GLANCE …
LOCATION: Port Augusta City Council is located at the head of Spencer Gulf – 3.5 hours north of Adelaide – and includes Stirling North and the seaside homes located at Commissariat Point, Blanche Harbor and Miranda. It has a population of almost 14,000 people.
MEDIAN AGE: 41
MEDIAN MORTGAGE REPAYMENT: $1083
MEDIAN HOUSE PRICE: $148,000
DAYS ON MARKET: 109
AVERAGE HOLD PERIOD: 12.5 years
MEDIAN RENT: $250
RENTAL YIELD: 8.8 per cent