(Bloomberg) --
Home prices in Australia's mining towns are leading the recovery in the property market, accounting for nine out of the 10 suburbs with the strongest growth in median prices.
The gains were led by a suburb close to the home to one of the world's largest lead smelters, as well as a once-struggling steel city, as record-low interest rates and an easing of bank-lending rules support demand.
“Mining towns are definitely having a moment,” REA Group Chief Economist Nerida Conisbee said.
Risdon Park South, a suburb of Port Pirie, the South Australian location of Nyrstar NV's smelter, registered a 71% jump in median prices in the 12 months ended August, according to the latest data from Hometrack Australia.
A 42% jump in price was recorded in the state's steel town Whyalla Norrie, where the median house price was A$138,000 ($94,500), and in the Queensland coal mining town of Blackwater, where prices surged 41% with 51 properties changing hands. Other mining centers in the top 10 include Newman, Quarry Hill and Dysart.
“Rental growth in many of these places has been strong for quite a while now,” Conisbee said. “It is now flowing through to pricing, likely driven by greater investor demand.”
Meanwhile in the capital cities, for the week ending Sept 8. preliminary auction clearance rates were higher across lower volumes compared with the same period a year earlier. Sydney and Melbourne led the charge, with clearance rates of 83% and 77% respectively.
The figures follow the latest CoreLogic Inc. data showing Australian house prices rose the most in almost 2 1/2 years in August.
The turnaround in established housing markets was also acknowledged by the Reserve Bank of Australia on Tuesday. Still, the central bank also noted that new dwelling activity had weakened and housing credit growth remained low.
To contact the reporter on this story: Rebecca Jones in Melbourne at revans6@bloomberg.net
To contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net, Paul Jackson
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