RED-hot property prices in Queensland mining towns are rapidly cooling as the global commodities boom slows.
Falling employment, a slowdown in mining construction and a weak outlook for export markets, particularly coal, are taking a big toll on local property markets.
A surge in building during the recent boom has also created an oversupply in markets struggling to fill existing housing stock.
Cameron Kusher, senior research analyst for RP Data, the housing research group, said: "This is purely a story of the mining sector. There has been a lot of expansion in the past five or 10 years and that has tapered off."
Rents in Moranbah, a mining town between Mackay and Clermont on the Peak Down Highway in northern Queensland, have dropped by half in the past 12 months; the median price is down 13 per cent and it is taking about four months to sell the average property.
Last year there were 46 houses sold in the town of 8000 people, down more than 70 per cent down from the previous year. The fall in median prices compare to a small rise in nearby Mackay.
In Gladstone, a town 550 kilometres north of Brisbane with a population of 32,000, the number of property sales were down 16 per cent. And in Mackay, 970 kilometres north of Brisbane, sales slipped more than 10 per cent.
Local estate agents claimed that the market had bottomed and that demand and prices might recover over coming months.Coal prices down
Falling coal prices have forced mining companies, including BHP Billiton and Anglo American, to review their operations, resulting in staff cutbacks, shelved expansion plans and asset sales.
David Fisher, principal of Vision Real Estate in Mackay, said: "Clearly the local market is very dependent on the resources sector, particularly coal. A drop in demand for commodities has an impact on the local housing market. Mackay has more industry than mining and prices have not been smashed. Houses are still selling for those willing to negotiate."
Mr Kusher said the weak outlook for commodities, and the dip in demand with the surge in supply, meant it would remain a buyers' market for the forseeable future for most mining towns in the sector.
He believes prices could slip another 5 per cent or 10 per cent.
The value of coking coal, used in steelmaking, has been falling since 2011 as new mines planned during the boom times move into production.
There are also high stockpiles overseas, for example in Asia.
Local builders and other trade specialists, who were last year under pressure to quit Queensland for the mining boom in Western Australia, are heading to Brisbane, or south to Melbourne and Sydney, as local jobs dry up because of the downturn in housing starts.
Mr Kusher predicts that the market will remain sluggish unless a significant pick-up in prices leads to mining companies committing to more investment and jobs.
