As Western Australia’s mining and energy sectors shape up for their latest boom, residents in the state’s mining heartland are scrambling to keep a roof over their heads.
Rents in the Pilbara’s two biggest mining towns, Karratha and Port Hedland, have increased by more than 120 per cent in five years, driven by an influx of resource workers and a shortfall of homes.
And with more than $160 billion in new mining and energy projects in the pipeline, the influx of mining work and mining money is leaving other residents behind.
“I love the weather … the scenery, the people here are amazing,” Karratha mother Debbra Duff said.
“It’s just a shame that it’s so expensive to live here.”
Her three-bedroom rental property just went to $950 a week and once her son finishes year 12, she will have to move somewhere cheaper.
“It’s so hard on people — everyday people, normal people … that don’t work for the big mining companies” she said.
‘We thought it was a typo’
Local support worker Elizabeth Milkovic said Ms Duff’s story was not uncommon.
“In the past I’ve … helped people with fuel to get to another town where there’s family and friends they can stay with,” Ms Milkovic said.
Over the last year, Karratha has seen an explosion in rent increases.
According to figures from Domain, five years ago the median weekly rent in Karratha was $470 a week. At the end of last year, it was $1,100 — a 134 per cent increase — the highest jump of any regional city in the country.
Marine pilot David Murgatroyd has lived in Karratha on a FIFO basis for 10 years and is well accustomed to fluctuating boom and bust rent cycles.
But even he was shocked by an email he got in April about the two-bedroom apartment he was renting.
“We were originally paying $979 a week, and we received a lease agreement saying that the rent had gone up to $1,850,” Mr Murgatroyd said.
“When we first saw it, we actually thought it was a typo.”
Crisis 60 years in the making
As in many regions around the country, high demand and a lack of supply are key factors driving up rents in the Pilbara.
But what makes the region unique is the tiny number of houses that actually reach the open market, according to Regional Development Australia’s Pilbara chief executive Tony Simpson.
“Of all the houses in Karratha, only 26 per cent are owned by people like myself, mums and dads – 74 per cent is a mining [company] investment,” Mr Simpson said.
That’s largely a legacy from the 1960s mining boom, when almost all the homes were built by companies like Rio Tinto and BHP for their workers.
The companies have sold some of those homes back to the public market but there are still few options for the supermarket, cafe and other small business workers needed to service Karratha’s growing population.
As smaller businesses and government agencies look to acquire properties to house their workers, those unable to match corporate and taxpayer-backed bids are forced to look elsewhere.
‘High-risk’ of people living in tents
During the previous mining boom, in the early-to-mid 2000s, conditions were so bad, people were forced to camp on vacant blocks.
City of Karratha Mayor Dan Scott said the council was doing all it could to avoid a repeat.
“There’s a high risk those scenes will happen again, with people living in their caravans,” Cr Scott said.
“So we are trying to get ahead of it.”
Land is not the problem — the city has plenty of it — but finding companies willing to take the financial risk of building homes is proving difficult.
“We need to work out a way to find solutions that enable builders to bridge the gap and make their margins,” Cr Scott said
“Because we’re seeing builders go bust all over the country.”
He wants the state government to help out by paying for the development costs associated with building new homes.
“What we’re calling on the state government to do is treat housing as common-use infrastructure,” Cr Scott said.
“So, the … associated costs being power and water to develop that land should be common use and provided so builders can roll out houses and make their margins.”
Rental system lacking empathy
Aside from more houses, Mr Murgatroyd believes less greed and more empathy in the rental market would make a real difference.
He earns a comfortable salary and owns half a property himself along with a friend.
Mr Murgatroyd said he understood the temptation to hike rents when a wave of wealthy potential tenants came to town.
“I got told we could get $850–$900 a week for the property … [I’ve] got a lady … a grandmother in there … she was paying $350, and we said, ‘Look, we are looking for more’,” Mr Murgatroyd said.
“But I wasn’t going to kick someone’s … grandmother out of the place. So we agreed on $400.”
Billion-dollar projects come with a cost
The projects expected to put the most stress on Karratha’s housing market and its services are Woodside’s proposed extension of the Karratha Gas Plant, and fertiliser company Perdaman’s under-construction urea plant.
A spokesperson for Woodside said the company did not currently expect its proposed project to increase demand for local housing because it would not involve building new processing facilities in Karratha.
Local planners have recently done a study to analyse how imminent resources projects will impact the community.
“The Woodside project, it’s 2,500 people coming into a camp, [and] Perdaman [is] another 1,400 people coming, ” Cr Scott said.
“So [the study] is about when those … people come to our town, what’s the impact of that going to be on our community?
“On our medical services, hospitality, retail, on anti-social behaviour, on our traffic, on our housing — because not everyone associated with those projects is going to live in a camp.”
Cr Scott said questioned how the city would cope with the expected influx of people.
“If we don’t get housing underway to capture that population growth … how’s our town supposed to survive and grow?” he said.
“Because if we don’t do it, depression just comes in our community. So the pain is for our communities, it’s not for the people flying in and flying out.”
Posted , updated