Perth Property Investment

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Perth Property Investment 2017

The Perth property investment market appears to be consolidating, with Perth property recording some encouraging capital growth and rental growth figures in selected areas the market as a whole is remaining steady. There is still huge potential of Western Australia to benefit from the rise of emerging Asia in the medium to long term, according to the most recent Deloitte Access Economics Business Outlook report.  This should be apparent through the usual suspects, such as iron ore, not to mention other existing and emerging industries including gas, education, tourism and agribusiness.

However, House rents continue to fall as the market shake-out from the end of the resources boom affects activity. The median weekly asking rent again fell – down to $400, a decrease of 11.1 per cent over the past year. Unit rents, however, were steady over the March quarter, following seven consecutive quarters of declines. Perth unit rents have fallen by 9.1 per cent over the past year, with both house and unit rents the lowest in five years. Vacancy rates increased over March and remain highest of all the capitals

There are also several major projects in development which will only be a boost to jobs and growth in the near-medium term, according to the Deloitte Access Economics Business Outlook report.

These include:

  • The major LNG projects (including the $61 billion Gorgon LNG project, the $29 billion Wheatstone LNG Project, and the $12 billion Prelude projects) which are due to complete their construction phases by 2017.
  • The $3.7 billion Cape Lambert port expansion
  • The $2 billion Nammuldi iron ore mine expansion
  • The 60,000-seat stadium in the Burswood precinct in Perth, which recently commenced construction
  • The $218 million North West Coastal Highway project, where construction is now underway
  • The $3 billion Perth City Link urban renewal project
  • The $1.6 billion Elizabeth Quay project, which is expected to extend well into 2015

Other observations included:

In the metropolitan area the median price of grouped dwellings such as units, apartments and villas grew by 2.5% cent to a median of $400,000.
The total number of properties on the market increased 6% since December, however the total number of dwellings sold jumped by 13 per cent; the highest turnover in two years.
The number of sellers who are dropping their asking price can be a good barometer of the market, and March quarter data show this has fallen 3% 65% cent of sellers in the market.
“The gap between the asking price and the selling price in Perth has also closed further, dropping to 6.4 per cent from 7 per cent in December. This trend suggests that more sellers are meeting the market and that pricing is being done with greater confidence as the median price levels out,” said Airey.

Outside of the state capital the median price for houses grew by 4%, or $15,000, to hit $380,000, but the RIEWA noted that units and apartments in the regions “remained steady” at $335,000.

All in all, however, Airey is confident that the worst is now behind the WA property market, and that there are reasons for optimism going forward.

“There is often a slump in the market during the winter months, but I’m confident that for the remainder of this year we will see sales turnover increasing and the median price gradually lifting as our state maintains its good economic growth and positive population trend,” he said. “It’s not a boom but it does look like a welcome return towards more normal market conditions.”

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