Predicting impacts of major projects on housing prices in resource based towns with a case study application to Gladstone, Australia

Abstract

The resources sector in Australia makes a major contribution to the national economy, and underpins employment and population in the mining and mineral processing towns. For those towns, rapid growth in employment can generate particular pressures in local housing markets because of the relatively large size of the industry and the small housing stocks involved. Through a case study of Gladstone, the study provides a dynamic five-step population and housing model, to estimate short to medium term mining impacts of major resource developments. The model includes both the direct and indirect labour force generated by new resource sector developments and their flow-on effects on population increases. Sensitivity testing has allowed for different levels of resource development, employment multipliers and labour inflows. Three different approaches have then been applied to predict the housing price impacts of the expected population growth.The results of the study show that the model can efficiently predict population and housing market dynamics where there is a resource boom and bust cycle, and can potentially be applied to other resource regions in Australia and elsewhere.