Below-Ground Dwellings, Coober Pedy, South Australia: Australian town where people live underground.. Coober Pedy is a small desert town in Australia where the entire population lives in underground homes. With outside temperatures hovering over 100 degrees, residents made permanent homes in the cooler temperatures of old mine shafts.. Coober Pedy is a town in northern South Australia, 846 km north of Adelaide on the Stuart Highway. The town is sometimes referred to as the "opal capital of the world" because of the quantity of precious opals that are mined there. Wikipedia











