Vision at mercy of rents

Regional Development Minister Brendon Grylls has admitted his Pilbara Cities vision is destined to fail if the government can’t find a way to reduce the region’s skyrocketing rental rates.

RP Data’s June quarter Rent Report released last week shows median rent prices for houses in the Pilbara tripled in the past five years to $1600 per week, the most expensive of any market in Australia.

Mr Grylls said Pilbara rents, which jumped 18.5 per cent in the past 12 months alone, would be a “major impediment” in transforming Port Hedland and Karratha into cities of the North.

“You won’t have 50,000 people living in Hedland if the rents are $1600 a week,” Mr Grylls said.

“Rents are still far too high and government needs to continue to do more to try turn that around.”

The comments come after shadow housing minister Mark McGowan likened the affordability of living in Port Hedland to Abu Dhabi. Mr McGowan claimed the Liberal-National government had failed to keep its promise to reduce the cost of living in the Pilbara.

“(It is) very difficult to become a city when the cost of living is somewhere akin to Abu Dhabi,” Mr McGowan said.

“It will become a city for the rich and a place where ordinary people can’t afford to live.”

Mr Grylls countered, saying the current government’s level of investment in the Pilbara was unprecedented and that the previous Labor government, in which Mr McGowan was Education Minister, were responsible for the current rent situation through a lack of investment.

“If the planning and investment had of been made when the previous government was posting $2 billion surpluses maybe the problem wouldn’t have been so hard to solve now,” Mr Grylls said.

“It’s been pretty difficult to unscramble the egg.”

Mr Grylls said planning was underway to launch a service workers housing village in Hedland, similar to that currently in Karratha, where the government provides subsidised rents for workers in the small business and not for profit sector.

He said such projects would help “normalise” the market and, in time, lower the median rental price.

“In Karratha we’ve got 100 units where government have built the villas and we’re renting them at subsidised rates between $350 a week for one bedroom (and) up to $500 a week for three-bedroom,” Mr Grylls said.

“We’re going to do (a similar project) in Port Hedland, we’ll probably need one of them in Newman as well after that.”

In an indication of the Pilbara’s unprecedented rental price growth, RP Data’s report shows the second highest five-year change in median house rents was Gippsland, Victoria, at 48 per cent.

Since 2006, the Pilbara median rental price has increased 327 per cent. Nationally, rents have increased 38.5 per cent in the past five years and 2.9 per cent in the 12 months to June.