In fact, it looks so much like a far-off desert planet that it has stood in for Mars in a series of Hollywood blockbusters. The pink sandstone formations rising out of the red dirt, framed by a sapphire blue sky, create an ethereal beauty easily mistaken for outer space.

Dotted around the 100-year-old mining town, halfway between Adelaide and Alice Springs, are the abandoned props from those films: a dilapidated spaceship here, paper mache aliens there. The eerie celestial monuments punctuate the red streets alongside discarded mining equipment and weathered opal shop signs.

Welcome to the opal capital of the world and the strangest town in Australia.

Coober Pedy’s heyday is well behind it and it seems frozen in the ’80s – the last opal boom. Mining has declined sharply since the ’90s, as the old guard dies off and the town transitions into its new life as an offbeat tourist attraction.

But why would tourists travel into the guts of the Australian desert to visit a mining town past its peak? Perhaps to see for themselves the most peculiar part of all, and the thing most Australians know about Coober Pedy: people here live underground.

It gets hot in Coober Pedy, really hot. The kind of heat that beats down on you, and then blows around you like you’re standing in a convection oven.

And it doesn’t make for a lively streetscape. On a 50 degree day – yes, they have those here – the whole town shuts down as people hunker down in ‘dugouts’.

Literally built into the side of the red and white mounds rising out of the otherwise the barren plains, dugouts can be recognised by the thin pipes sprouting from the rocky knolls. They’re for ventilation  and are covered in mesh so snakes don’t drop down into the living room. The wide, older-style air shafts have been phased out because drunk miners used to fall into them walking home from the pub.

“The old miners, when they came here, they realised they couldn’t live in a tin shed or a tent because you’d die, it’s too hot,” says miner John Dunstan, who’s been in the opal game for over 50 years.

“A lot of the old original dugouts, the miners actually tunnelled down a little drive into their mine and lived in there … later on they started building underground homes and it’s the same principle – just a tunnel going into the hill and then some rooms.”

About 65 per cent of the 1800 to 3000 people in town (much of the population travels, so it’s hard to get an accurate reading) live in dugouts. While many older ones are cramped, narrow spaces that would send a claustrophobic’s heart rate north, most of the modern ones are large, open and styled like any modern home.

“We’ve got four different doors you can get out of our place – there’s plenty of light, plenty of windows,” says Mr Dunstan.

Walking into a dugout on a 40 degree day, it’s easy to understand exactly why people want to live underground. It’s the kind of heat relief you get walking into an air-conditioned shopping centre: so noticeable that out-of-towners make an audible sigh of relief.

Generally, heating or cooling isn’t needed – it stays about 25 degrees during summer scorchers and winter nights when it drops to minus two. It can be 36 degrees at midnight and residents sleep with a doona.

The older-style dugouts were built by hand. Explosives tore through rocks and homeowners would then pick and shovel them out. These days, tunnelling machines do the work and businesses trade on building them, although there’s not that much space for new homes – there are only so many rock formations left to carve out.

The bedrooms, usually at the back of the house, are so dark that dugout residents keep a torch next to their bed in case of power outages (which happen frequently in summer, thanks to the above-ground residents thrashing their air conditioners). Cool, dark and silent, any Coober Pedian will tell you it’s the best night’s sleep you’ll ever have.

“You don’t actually know dark until you’ve been in a dugout at night,” teacher Elyse Kowald says.

Everybody here bristles at the suggestion that dugouts are claustrophobic.

Real estate agent Misty Mance, of Lin Andrews Real Estate (the only agency in town), regularly sells dugouts and says people quickly fall in love with life underground.

“I had a family earlier in the year, when they first came to town their little boy, about 3 or 4, was very scared, he didn’t want to go underground,” she says.

“Two months ago they bought a family dugout from me and their kids love it … it was just that initial taking him to friend’s houses, getting him used to being underground, and now the little fella won’t look back.”

Ms Mance says real estate has taken a bit of a dip in recent years as the opal boom has wound down. You can pick up a dugout anywhere from $130,000 to $250,000.

But houses here can actually make you money. When Mr Dunstan was renovating his home (by digging out new rooms from the side of the rock) he found an $85,000 opal – simply because his wife asked for a pantry.

Dugouts actually make better use of space than an above ground home, because if you need to fit a bulky TV cabinet or sofa, you can just blow out a customised hole in the wall.

Since 1915, people have been looking for opal in Coober Pedy. After World War II, a flood of European miners came, trying their luck on the opal fields. And you need luck to find opals.

Opal mining is so difficult and relies on such chance that companies don’t bother with Coober Pedy. If they tried to mine here, they would go broke. Opal mining is exclusively the domain of hard-working individuals.

But the lifetime miners – those who witnessed the town’s booming nightclub and 24-hour restaurant days – have gotten old. And despite a big resurgence in opal prices, due to interest from China and India, they rarely pass the difficult trade down to their kids.

“Over the last 20 years, we’ve had hardly any new opal miners coming to town; it’s mainly us older blokes, still hanging on,” says Mr Dunstan.  

Dimitrois “Jimmy the runner” Nikoloudis, a lifetime miner known to all in town, believes the “golden age of Coober Pedy” mining is long gone.

“In my years, the average mining age would have been something like 25 years of age. The average today would probably be 69-70,” Mr Nikoloudis says.

“It has become a tourist attraction, about 10 per cent for miners and 90 per cent for the tourists. The mining? It’s just history now, we talk about it.”