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While there still might be an element of risk associated with investing in mining and resource-driven towns, the sensible resolution on the Resources Super Profits Tax (RSPT) by the Federal Government makes this type of investing a consideration once more.
Rpdata.com research analyst Cameron Kusher recently investigated if now is the time to invest in mining or resource-driven towns and found that although there is still an element of risk, the returns could be significant.
However, he says, timing and market knowledge is everything.
“For property buyers, the timing may now be right based on the recent announcement that the Federal Government and the resources sector representatives have come to an amicable solution to the RSPT.”
This, he says, coupled with commodity prices taking off again after a substantial slump during late 2008 and 2009, means it is clear that demand for commodities is ramping up.
He believes that given this factor, there is likely to be a higher level of demand for Australian mines to pull resources out of the ground at a more rapid pace.
“That means more workers and more demand for housing in what are generally chronically undersupplied markets.”
Kusher believes that the Roebourne LGA, which is located in the north-west region of WA and includes the townships of Karratha and Dampier, is likely to present great opportunities for buyers, especially with its major attributes of being in the heart of a lucrative iron ore mining region and home to a major shipping port.
Another standout performer, he says, is likely to be the coal-rich Isaac LGA in Queensland’s Bowen Basin, which includes the towns of Moranbah, Dysart and Clermont.