Mining boom benefits real estate rental figures in areas of Toronto, surrounding suburbs and the Hunter Valley.
Paul Wrigley from Ray White Real Estate Toronto says the real estate market in Toronto and Lake Macquarie, the area he specializes in, is in great shape and that the mining boom obviously has and is having a big part to play.
“Rental figures in our area are at an all time high as is the demand for more investment properties. As an investor it is a great time to buy real estate in Toronto and Lake Macquarie”.
A report released by Larry Schlesinger – www.propertyobserver.com.au suggests a growing demand for mining accommodation has resulted in a sharp escalation in the median rental price in the Hunter and Illawarra regions of NSW, with rents for units and houses up around 9% over the past year, according to analysis of data from the NSW Department of Housing by PRDnationwide.
Demand for rental accommodation was particularly strong in Maitland in the Hunter Valley, which registered the highest increase in rental bonds across NSW with growth of 29.7% in the 12 months to September. Maitland was followed by Kiama on the Illawarra South Coast, with 23.7% increase in rental bonds over the 12-month period.
“Rental growth around the Hunter is generally related to the intensification of mining activities,” says PRDNationwide.
The region is attracting new arrivals with specialist skills in engineering, resources and mining with Hunter mining giant Coal and Allied operating Hunter Valley Operations, Mount Thorley, Warkworth and Bengala mines in the upper Hunter Valley. In total there are about $21 billion worth of mining projects underway in the Hunter Valley.
In July engineering group Downer EDI said it was looking to employ 400 people to help the Ravensworth North Coal Project in Newcastle after winning a $400 million contract with Xstrata Coal to develop the Ravensworth North Coal Project.
There was also strong rental growth in other NSW regions close to mining activities. The median rental price for three-bedroom houses in the regional centres of Newcastle and Wollongong increased by more than 8% while rents for two-bedroom units increased by close to 10% in Newcastle, Port Stephens and Shellharbour. Overall, the vacancy rate for the Hunter and Illawarra regions averaged just 1.7% compared with 1.3% for Sydney metropolitan region.
Commenting on the increase in rents across NSW, PRDnationwide says that in an environment of softer house prices, “an increase in rent is welcomed by landlords and normally indicates a strong economy and large changes in population”. “However, around NSW and indeed Australia local residents who are not part of the mining industry are often being priced out of the market by companies that pay above-market rents. This in turn leads to negative social consequences and increases the pressure on government housing.”
Rents in WA mining towns are also booming.