Boom towns: not always a great place to live

THE expansion and growth of the coal mining industry in the Bowen Basin in Queensland has brought with it jobs, prosperity and rising incomes. But on the other side of the coin are rising house prices and local communities that feel the boom has left them worse off as rentals dry up, homes become impossibly expensive to buy, and lower income workers are forced out of the area. Kate Haycock reports.
Boom towns: not always a great place to live Boom towns: not always a great place to live Boom towns: not always a great place to live Boom towns: not always a great place to live Boom towns: not always a great place to live

WMC's Mt Keith nickel operation

Kate Haycock

With prices for a plot of land in some parts of the Bowen Basin rising by as much as 1300%, and rents and associated costs also increasing drastically, it is a sign of the newfound wealth in the region driven by the coal industry.

While many people are doing well out of the boom and the associated real estate market, some in the local community are deeply unhappy.

Belyando Shire Mayor Peter Freeleagus takes issue with the way the effect the coal industry has had on smaller towns near the mines.

“Mining companies are happy to provide single person’s accommodation but they’re no longer willing to build accommodation for families,” he said.

“Because land is at a premium, the contracting companies have bought up all the available properties around town and the investors have bought up what’s left over. It doesn’t affect the mining industry – it affects those poor guys who don’t want to work at the mines who are happy to work at the garage. They find it hard to purchase and if they can’t purchase, they find it increasingly hard to rent.”

Average property prices in the main town of Moranbah have gone up by 300%, he said, which has seen Sydney-style “rental auctions” in which downpayments of up to $500 are placed for a rental, while rent for single rooms have reached as much as $200 per week.

“The service industry is probably the worst hit … The poor old bloke who works at Coles and the man fixing up those mining vehicles, it’s become increasingly hard on them because rent rises have gone through the roof,” Freeleagus said.

“There seems to be a hidden agreement for [the coal companies] to all say that it would impossible for them to … pay for housing. And the companies seem to be happy for families to live apart and become dysfunctional.

“If you want a smoke, the government says you can’t smoke inside a building, but if you want the Queensland Government to make a coal company pay for housing – nope they can’t do that.”

Emerald Shire Mayor Peter Maguire agrees that the mining expansion has had both positive and negative effects on his community.

“Most people would like to be in an area of an economic boom, which is what’s happened in the region because of the expansion in the coal mine industry, it’s provided a lot of development opportunities for businesses and industry in the region, and people in the workforce are obviously well paid and there’s a lot of great opportunities for people across all trades,” he said.

“Clearly the [housing] prices have been affected – it’s a supply and demand problem. The price of real estate has gone through the roof. Particularly, vacant blocks of land have gone from $40,000 to $125,000 in Emerald.”

The problem is not just with land prices, however, it is also getting developers and builders and workers out to build new houses in the more remote parts of region.

“We’ve got 800-900 housing allotments approved, the problem has been developing them,” he said.

Additionally, while the real population of many towns in the Bowen Basin has swelled, for government purposes these people often don’t exist.

“A lot of coal companies, they used to build housing for their workforce in townships, now they tend to be building work camps for them. That’s got its own issues. The population figures that governments do, don’t reflect the people in itinerant camps,” Maguire said.

This can mean funding from infrastructure does not necessarily match the true requirements of the area.

Maguire points to the higher levels of government as being heavily responsible. “The coal mining industry pays over $1 billion of royalties to the state government. The Federal Government is getting a lot of money out of businesses too – and they’re not putting back in either. Both levels are ripping a lot out of this area, and local governments are saying we’re not getting it back.”

The Real Estate Institute of Queensland has been tracking the growth in the region, with chairman Peter McGrath describing the shire and town of Emerald as having “staggering” growth of more than 25% in the median house price in the last year, while the nearby shire of Banana has seen even stronger growth of around 35% in the same period of time.

“It’s totally reflected in what’s happening in the mining area in terms of expansion of the mines and what’s happening with extra people coming to service the mines and the income those people are receiving out of the mines,” he said.

“It’s good for those shires in one way but causing pressure in other areas, i.e. rentals, as those prices have been driven very hard. It’s made it difficult for the local community to afford to buy or rent a home.

“Many people are living in tents or caravans while they wait for properties to become available … Government figures show that for the December quarter last year, the median rent for a three-bedroom house in Emerald was $350 per week – the highest in the state. In 2004, the median price was just $250 per week.”

As for the composition of the housing, McGrath said it is a demand issue that is causing the mining companies and property developers to focus on single-person accommodation.

“From a developer’s point of view the demand is greatest in single accommodation. [But] it’s only going to be a matter of time before family-style accommodation comes back into vogue because there are literally hundreds of families that wish to buy new in those areas.”

Professor of regional economic development John Rolfe is heading a research project funded by the Australian Coal Association Research program, an industry body, which is examining the social and economic impact of mining development in the Bowen Basin. He points out that while housing development has boomed in regional centres like Emerald, Rockhampton and Mackay, smaller towns have been left high and dry.

“The level of building is lower and rents are really high. The key reason is that investors are not as confident that the boom will stay forever. And building expenses are very high,” he explained.

“This boom is different to the others – almost...click here to read on.

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