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Interest rates up, but property prices soar in Pilbara region

The Reserve Bank of Australia (RBA) increased interest rates yesterday by 25 basis points percent to 4.5 percent as house prices in Western Australia’s Pilbara region continue to soar.

Interest Rates Pilbara House PricesThe Reserve Bank made the move to increase the official cash rate by 25 basis points, from 4.25 percent to 4.5 percent, marking the sixth increase in the past 8 months.

Domestically RBA Governor Stevens was concerned about the escalation of housing prices, despite some moderation in borrowing to fund domestic dwellings in the first six months of the year after successive interest rate increases.

“New loan approvals for housing have moderated over recent months as interest rates have risen and the impact of large grants to first-home buyers has tailed off. Nonetheless, at this point the market for established dwellings is still characterised by considerable buoyancy, with prices continuing to increase over recent months.” Mr Stevens said.

Housing prices in Western Australia’s Pilbara region are struggling under the strain of the influx of workers for the massive resource projects underway. With the price of housing in Karratha, Port Hedland and Newman skyrocketing.

Shadow Housing Minister Mark McGowan said figures obtained by Labor showed house prices had grown significantly.

“In Karratha the average price of a house in September 2008 was $798,000, yet at the start of this year it had grown to $921,000,” Mr McGowan said.

“This is a $123,000 price increase in just 15 months.

“In Port Hedland the average price of a house in September 2008 was $767,000. At the start of this year it had reached $887,000 – an increase of $120,000.

“In Newman prices increased from $568,000 to $596,000 – an increase of $28,000.”

Mr McGowan said at the end of last year the average weekly advertised cost of four bedroom rental properties in Karratha was $1704 a week, $2292 in Port Hedland and $1600 in Newman.