Thursday, 4th July, 2013
By Kurtis J Eichler
Angry real estate agents have slammed a magazine article that depicts Broken Hill as an investor’s nightmare.
Australian Broker Online editor Aidan Devine’s article ‘Australia’s biggest housing investment myth’ has received a scathing review from local realtors fighting to prop up optimism in the Broken Hill market.
Mr Devine writes there is no shortage of bad press when it comes to mining towns despite statistics showing growth in the market.
“Mines close, workers get retrenched, developers build too much rental accommodation - any and all of which could happen at one time,” he writes.
He used Broken Hill as an example of the uncertainty in the market, going from a booming mecca to a shadow of its former self.
“By the 1970s a lot of the mines that had nurtured the city’s growth began to close and this sent the local employment market into free fall.
“The population, which at that stage had been 30,000, quickly dwindled to 10,000.
“Property prices plummeted. What had once been a boisterous real estate market had a hole blown from under it and investors had no escape.
“In the forty years since, the population has slowly increased to about 17,000 and mining activity continues, but the city has never returned to its prior heights.”
One of Mr Devine’s sources, Next Hot Spot director Andrew Peterson, said mining towns were “not ideal places to live”.
First National principal Zeta Bennett joined a chorus of estate agents who called Mr Devine’s article “over dramatic”.
“It’s obviously concerning that an article can seem so negative,” Ms Bennett said.
“Perhaps if he’d talked to locals on the ground then he’d be more balanced.”
Ms Bennett said there wasn’t a lot of investment in the area and these smear pieces didn’t help the city’s perception.
“It was good for a few years and it’s tapering off now,” she said.
“Sales might have suffered but the rental market is going along quite well.”
Century 21 principal Matt Handberg poured scorn on the article, saying there was still a lot of positives about the Silver City.
“Here in Broken Hill our 2012 rental return was 8.6 per cent which is quite a decent return when you are comparing it to a term deposit.
“With the medium house price somewhere between $100-120,000 it’s still quite a viable investment for a Mum and Dad investment because they don’t have to outlay $400-500,000 to buy something.
“A negative article like that is not good if it is read by potential investors around the country.”