Early movers benefit from entry into Pilbara property market

Momentum Wealth
  • Pilbara property market heats up
  • Property prices record 7.7% median price growth during September quarter with Karratha, Port Hedland and South Hedland leading the way
  • Investors in the Momentum Wealth Pilbara Investment Fund benefiting from price growth and increasing rental yields

Early movers into the Pilbara market are benefitting from strong returns as housing prices experience a period of sustained growth.

Newly released data from the Real Estate Institute of Western Australia (REIWA) shows that savvy buyers who identified opportunity and entered the Pilbara market 12-months ago have experienced significant growth, with median prices increasing 14% over that period.

Suburbs in Karratha are leading the price growth with Bulgarra recording a 36.5% increase in median price across the past year, while Millars Well and Nickol recorded 31.7% and 28.6% growth respectively.

Port Hedland and South Hedland are also showing continued signs of growth, up 8.5% and 4.3% during the September quarter alone.

Perth property investment firm, Momentum Wealth, which established a Pilbara investment fund in early 2019, said that increasing activity in the mining sector and a lack of supply were acting as key drivers.

“We have been monitoring the Pilbara market for several years and noticed an increase in mining activity in 2018 which, coupled with strengthening iron ore prices, was leading to population growth that was placing significant upwards pressure on property values,” said Momentum Wealth’s Head of Developments, Philip Anderson.

“These conditions offered a great opportunity for investors to enter the market and capitalise on rising house prices, and we experienced overwhelming interest when we launched our Pilbara investment fund in 2019,” he said.

Mr Anderson said the demand for rentals is also helping to increase rental yields as more people return to mining towns and look to secure housing.

“Investors are now benefitting from increasing rental prices due to the limited stock on market, resulting in the Pilbara region recording median rent of $600 during September this year.”

“Our investment fund focussed on targeting low maintenance houses that didn’t require remediation work and offered high rental value, as well as strong potential for a future uplift in capital value,” he said.

Mr Anderson said the fast-moving nature of the Pilbara residential market offers significant opportunity to capture high returns across a short period, but investors need to be wary of market volatility.

“The boom and bust nature of mining towns offers investors lucrative opportunities, but there is inherent downside risk which makes timing the market crucial.”

“Not only do investors need to time their entry into the market, but they also need to plan their exit to ensure they can maximise capital growth,” he said.

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