Rents in the Pilbara have reached $3000 a week on the back of major mining projects, sparking warnings that the region's housing situation is unsustainable.
Local estate agents say a spate of mining project announcements have increased residential rents to levels higher than before the global economic downturn, with the situation worse in Port Hedland than Karratha because of less land being released.
BHP Billiton and Rio Tinto have just agreed to combine their WA iron ore assets and the first sod has been turned on the $43 billion Gorgon LNG project.
A five-bedroom house in Port Hedland on an ocean block is being leased for $3000 a week and a seven-bedroom fibro house with ocean views on a 1330sqm block recently sold at auction for $2.3 million - $1 million above the reserve price.
Agent Brett Philp, of Ray White Port Hedland, said the property, previously owned by the State Government and used as an office block, was sold to a local business owner who intended to use it as accommodation for his employees.
Mr Philp said he had not heard of such a price being reached in Port Hedland before for a residential property.
"The confidence here is just staggering," he said. "It is just insane."
REIWA Pilbara chairwoman and Port Hedland real estate agent Jan Ford said good four-bedroom houses in Port Hedland were renting for about $2500 a week while an average three-bedroom house was being leased for about $1600 to $2000.
"It's not sustainable to have these sorts of rents because at the end of the day no matter how much rent you pay, it all gets added on to the end user," she said.
Ms Ford said many of the properties were owned by investors from Perth and interstate, which meant locals were priced out of the market.
Mining companies usually leased the properties and subsidised the rent for their employees, she said.
Richard Naulls, director of sales at Ray White Karratha, said rents for top-of-the-range four-bedroom properties in Karratha were about $2200 to $2500.
Debra Tarabini, a property investor from Perth, owns four properties in Karratha with two friends which each rent out for about $2000 a week.
"We've always wanted to get into Port Hedland but to pay a million dollars for something that was built in the 70s, is asbestos and very unattractive, we just can't part with our money even though they do get very good rentals," she said.
Jade Saligari, 26, who works in sales, is one of seven people renting a five-bedroom house in Karratha at $2500 a week.
She has had to take up a second job to help pay the $500 a week rent she pays for a room she shares with her boyfriend.