Thursday, July 13, 2006

Fired Up

A spate of house fires over the last year in Rosebery, an isolated town on the far west coast of Tassie, has locals worried, according to The Advocate, the north-west's newspaper. Rosebery is one of those mining towns which rise and fall with the prosperity of the mines, and the mines in the region are continually being kept open by government handouts and intervention. Ten years ago you could buy a house in Rosebery for $10,000, but today's fire 'caused damage [to the latest house] estimated at $220,000'. Why the big difference? Well, we have had a real estate price boom in the state over recent years - as more Mainlanders discovered the idyllic life down here and the comparitively cheap cost of housing, the local market naturally went up, so that values soon fell into line with the rest of Australia. But those West Coast mines just aren't ever going to be viable ever again. What goes up must come down, and housing values in Rosebery and other mining towns will drop again as they become mining ghost towns in the future. It must be a hell of a temptation for a person who had a house that was worth $10,000 a few years ago, is insured for $220,000 now, and who knows that it will only drop in value in the future. I'm not saying that people are burning their own houses down for the insurance money. Just that it could be very tempting.

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