WA turns towards tourism and agriculture
There’s a lot more to WA than iron ore. In fact, signs are indicating a resurgence for agriculture and tourism once the resources boom fades
Too often it seems that media headlines are linking the WA property market directly to the wellbeing of the mining industry. But investors should take heart from the fact that WA has a diversified economy and other areas look like they will be picking up steam.
Although the resources sector still has life left in it, the state is placing increasing emphasis on its tourism and agricultural industries.
Currently, tourism provides 91,000 jobs for West Australians. It contributed $8bn to the local economy in the 12 months to March 2014. And, according to Tourism WA, the number of international visitors to the state grew to more than 776,500 during that period, which is up 4.3% on the same time last year.
In particular, there are an increasing number of Chinese visitors targeting WA, with 33,900 arriving in the 12 months to March. This is significant because Chinese visitors spend about $5,000 on average, which is a massive $3,000 more than the average international visitor.
In the recent state budget, the government allocated $3.9m just for tourism marketing to China.
Even regional centres are proving to offer much more than just minerals. The Pilbara region, for example, boasts spectacular gorges, magnificent rock formations, stunning beaches, music festivals and Aboriginal culture. In 2013, the total visitor spend in WA was $7.7bn, $3bn of which was spent in regional WA.
Why agriculture is crucial
Agriculture in WA could be on the verge of experiencing its best fortunes in more than half a century, particularly due to the growth of Asia, according to WA premier Colin Barnett.
“If we see this as just another ‘good time’ for farming, then we will have failed. This is the opportunity to take agriculture to a new level and to provide greater financial security for farmers and to provide benefits for all West Australians,” says Barnett.
Indeed, Asia is already a significant importer of Australian food commodities, and the average annual incomes in India and China are expected to grow by 5.5% each year to 2050 – approximately double the rate expected in Australia.
“With higher incomes, consumers spend more and spend differently. Staple food commodities will benefit, but the new prize will be areas of higher quality and diversity,” says Barnett.
The typical size of a wheatbelt farm in WA has grown from about 4,200 acres in the 1970s to over 10,000 acres today.
There are now new opportunities for farms to take on a more corporate structure to better exploit the current opportunities available through the agricultural investments of large private, institutional and foreign investors, says Barnett.
Currently, the total value of WA’s agriculture and food products is $20bn at the retail and export levels, and two thirds of its agriculture and food products are exported.
After years of struggle for the farming sector, it is now predicted that it will grow faster than the mining sector due to strong demand for the state’s food products.
SUBURB TO WATCH
Edgewater: On the verge of strong growth?
As the name suggests, Edgewater is just a few minutes’ drive from the lake and some of the best beaches in WA. In fact, choose the right property in this suburb and you will get stunning views of the city and/or the ocean, and of green, leafy and quiet surroundings.
Its proximity to the coast, cafes, schools and universities makes this area a popular one for students, families and retirees. And despite having all the basic amenities in the suburb itself, it is right next door to Joondalup, with its excellent and improving shopping facilities, parks, schools and nightlife. If that’s not enough, the Perth
CBD is just 22km away.
The suburb also has great transport infrastructure, and the Edgewater train station has regular services to both Perth City and Joondalup.
Edgewater’s 12-month growth of 1% is well behind its average annual growth of 8.7%, meaning there is plenty of room to grow. Moreover, its median house price of $548,750 is significantly cheaper than that of neighbouring suburbs such as Connolly ($700,000) and Woodvale ($665,000).
Furthermore, houses in Edgewater seem to be selling like hotcakes, as they spend just 27 days on the market – an outstanding figure for the general Perth area.
Clements Court is a quiet cul-de-sac with water views, and is perfect for families. A large four-bedroom, two-bathroom house can be bought for less than $600,000. Lakeview Drive has excellent scenery but some properties there can exceed the $1m mark. Other popular streets include Wood Ridge, Reflection Close and Passerine Close.
Can you afford to buy in this suburb? Find out how much you can borrow