Resource dependent mining towns are going from ‘bad to worse’ according to latest figures.
There have been some stark reminders for investors who plunged head first into the mining & resource investment boom towns & regional centres in recent days, weeks & months – as Australia’s national economy shifts from a heavily dependent resource sector to other industries such as manufacturing.
In fact, in some parts of Western Australia, including Port Hedland, conditions have become so bad that just recently a house had passed in at auction for $360,000 – having been bought four years ago for a reported $1.3 million.
As experienced property analyst Louis Christopher states, “It’s a very sobering result and it could be a sign of worse to come in the Pilbara region if the iron ore price keeps dropping given burgeoning global supply.”
These latest reports serve to illustrate the point ever more that it’s never a safe bet to invest in areas heavily dependent on one particular industry, resource or employment generator. It’s always prudent to invest in areas that have a diverse economy, and thus can weather the storm should unexpected events occur.
Again, this is why IPRG take the time to research locations and regions that are likely to experience long-term capital growth, not merely high yields and short-lived growth in the short-term.
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Source: Property Observer