1,300 kilometres shy of the North Pole stands a former-Soviet township of Pyramiden. Once a thriving town coined as ‘a Soviet paradise’, it was deserted in 1998 when the last tonne of coal was extracted from the soil. It is now maintained as a means for travellers to see ‘a town frozen in time’. An equally barren landscape is familiar to rural townships in Australia which apprehensively bear the same fate. Kiandra, NSW; Linda, TAS; and Malcolm, WA contribute to a long list of Australian towns deserted after the single industry that they depended on fatefully declined.
Resource booms have given rise to many secondary opportunities within Australia. One of these opportunities was investing in residential property within the particular high-growth regions. A driving factor behind the appeal of these investments was the major increase in highly-paid work available, much of which was relatively unskilled and accessible. This resulted in rental yields that could exceed 20% in some cases. But with high returns created from a frenzy of transactions and rental increases, there must also be a corresponding risk.
That risk is now being expressed through the increasingly prevalent use of FIFO (fly in, fly out) workers. It is exacerbated when they are single-industry towns. With mines in Queensland moving toward a 100% FIFO policy to access tax concessions (BMA Caval Ridge in the Bowen Basin for example); the risk of these townships heading towards complete demise is increasingly likely. Prospective employees are following suit, preferring to reside in their metropolitan or suburban origins rather than permanently relocating to the rural mining regions.
With a reduction in infrastructure spending and demand, as well as an economic and demographic shift in the regions, these areas are unlikely to become a valuable investment. The notion of these once-vibrant and frenzied towns becoming ‘ghost towns’ has been illustrated time and time again both in Australia over the last 200 years and internationally. Avoiding the difficulties associated with one-industry towns is addressed through considering the macro factors of ‘Economics and Employment’, and ‘Population and Demographics’ in Blue Wealth’s research model. A fundamental principle is that an area must have multiple ‘pillars’ of support which includes a diverse array of industries. One important thing to remember, is that the technology of FIFO and working from a remote locality could speed the process of what we have seen in the past.