A lack of confidence in the long-term future of the Pilbara’s economy has historically hindered development in the area, according to a new report by Knight Frank.
Development of the Pilbara region started in the 1960s, following the discovery of iron ore. According to Knight Frank’s The Pilbara Region report, the 500,000 square kilometre region holds around 31 billion tonnes of iron ore, and up to 3.5 billion tonnes of magnetite. The current estimated lifespan for iron ore mines in the region is 15-30 years.
“A steady demand by international markets for resources mined from the Pilbara region will see the continuation of these [mining] activities,” the report says.
Two key towns that are expected to see the biggest population increases in the region over the next 25 years, Port Hedland and Karratha, are among a handful developed in the 60s to accommodate mining.
Planning WA forecasts that the Pilbara region population will more than double to 140,000 by 2035, up from the current 60,000.
The majority of the construction workforce is fly in-fly out, according to the report. But new levels of demand have seen the median house price in the Pilbara increase by 79 percent over the last five years, to its current $775,000.
The resources industry is the region’s biggest employer, and in recent years , infrastructure investment has seen high levels of construction employment.
To drive population growth via transformation of the region into modern, higher density cities, the WA Government introduced the Pilbara Cities initiative in late 2009. It has facilitated opportunities for private developers to construct short-term and permanent housing. In addition, the “Lazy Lands” infill project identifies Crown Land that can be developed into housing.
Six of seven “Lazy Land” sites in Karratha have been awarded to developers to date. In addition, private developer Finbar Group has constructed Pelago West, comprising 114 apartments, and an additional 178 will come online with completion of Pelago East in 2014.
A $65 billion Karratha CBD redevelopment is underway and construction has started on the Karratha Leisure Centre, to be complete mid-2013. A 7-storey, four-star Hilton Hotel comprising 144 rooms will start construction in 2013.
In Port Hedland, stage one of the $23 million South Hedland town centre revitalisation was completed in December 2011, and stage two is currently underway. Private developer Humphrey Land is constructing 104 residential apartments and a BHP residential and commercial development is to be completed in 2014.
Finbar Group will redevelop the former Port Hedland hospital site into a $300 million mixed-use residential and commercial building, comprising 367 short- stay apartments and 3900 sqm of commercial space.
There is also a planned redevelopment of the Spoilbank Marina and Port Hedland airport.
Port Hedland is home to WA’s biggest tonnage port: 218 million tonnes were exported in 2011, 202 tonnes of which was iron ore. Expansion of the inner harbor was proposed, adding an additional 11 berths and increasing export capacity to 495 million tonnes per annum.
However, BHP announced it will scale down inner harbor development following Fortescue Metals Group’s announcement it will “curb” expansion plans, in September this year.