Perth is booming. Cranes and glossy signs touting new development abound. Prices here are quite high, with a standard meal coming in somewhere around 30 AUD. A case of beer is between 40-50 AUD at the liquor store and the cheapest coffee around is nearly $4. The financial center of the Western Australian mining industry has seen both rapid growth and rapid inflation.

A common statistic with the locals is that 1500 people a week are coming to Perth. 75,000 people a year. Perth has been growing by a little over 5% a year since 2000 which alone is a staggering statistic. By comparison the fastest growing cities in the US, Austin, TX and Las Vegas, NV, have grown by less than 3% a year and the development in both of those was stupendous. The infrastructure, residential and commercial development necessary to withstand this kind of sustained influx is enormous.

Newspaper after newspaper finds a reader properly bombarded with full page ads for luxury development units. These units under construction in the Subiaco area are priced about A$500,000 for a one bedroom, and $850,000 for 3BR/2BA.

Even for a veteran of both NYC and Chicago real estate, these prices seem incredibly high. Especially given all the projects currently under construction.

Opening the local newspaper in the barber shop, I found two articles about real estate, and neither were particularly bullish. One article talked about the amount that rents were currently dropping in the area, spinning it as “good for renters” whereas the second article talked about a softening in recent home price sales.

The barber was talking about the price of his flat having gone from $200,000 to $600,000 since he bought it 9 years ago. Having lived through the American housing bubble, this sounded awfully familiar. Once upon a time, Joe Kennedy preserved a lot of capital after a shoe shine.

The Aussie dollar hit 3 year lows of $.88/AUD in January, but has since rallied back to about .92. The Aussie has been hit hard in the last year by falling commodity prices. Another year of falling commodity prices will hit this economy especially hard, Perth especially. Mining made up 30% of the Western Australia’s GDP in 2010, and miners I’ve spoken to have said that work is getting increasingly more scarce. One experienced miner of 5 years I spoke to was having trouble finding work, even with his advanced mining credentials. Another cabbie I spoke to, had changed careers after 41 years as a mining engineer.

A real slowdown would send all this development to a screeching halt.

Some Australians point to Chinese investors as a large part of the growth, but that seems to be more of an east coast phenomenon. Chinese investors are surely playing a role in development, but most of what I’ve seen has been an influx of mining money. For a city growing at such a torrid pace, Perth seems like a perfect proxy for a contrarian mining play.

While Western Australia is most closely linked to mining, there are no shortage of mines across the continent. Currently, there is a notable debate regarding the dumping of mining refuse (mostly dirt, clay and sand) within 4 kilometers of the Great Barrier Reef. It has been a topic that I’ve heard up time and time again since I’ve been in Australia. There is a significant backlash against the Prime Minister Tony Abbott, who has been characterized to me as a very pro-business (re: pro-mining) politician.

This argument has two sides to be sure. With 1500 people a week moving to Perth because of the mining boom, there is obvious support for these policies as well. However, many Australians consider it their civic duty to protect the reef, as an ecosystem that has been thriving largely unspoiled since the beginning of time, but in the end cash is king and the mining companies are willing to pay. This debate reminds me of so many others. Every sacrifice has a dollar price, even the Great Barrier Reef.

Casually looking at both sides of the Great Barrier Reef argument, it seems reasonably safe. Russell Reichelt, respected marine biologist and chairman of the Great Barrier Reef Foundation, the independent overseers of the Reef, has come out and voiced the safe science in favor of this. Of course, as in all these debates, each side has their own science and tries mercilessly to discredit opposing researchers. When did science become debatable?

As Australia reaps the benefits from its vast landmass and copious natural resources, I wonder if they are fully appreciating what these influxes of one time cash are really costing them.

There’s only one Great Barrier Reef.

Thank God it isn’t owned by a poor country, or we’d have ruined it decades ago. I wonder very seriously if it could survive my own US.

Australians are deciding every day how they are going to utilize their natural resources to the benefit of their citizenry. Let’s hope they make the right calls.