WA is looking to diversify its economy to inspire confidence in the market and boost its population growth
Perth is making moves to pick itself back up following its prolonged stay at the bottom end of the market, but the process will not be easy as investors remain wary of buying in this state.
“While the market may level out in the next six months, it’s much too early for a countercyclical investment in the west – I can’t see prices rising significantly for a number of years,” says Michael Yardney, CEO of Metropole Property Strategists.
“Due to the significant oversupply of new apartments there is little to no prospect of capital growth or rental growth in the Perth apartment market for many years.”
Yardney believes that the future of WA as a whole rests in its economy, which needs to gain considerable momentum in order to attract interest and bring in residents.
While approximately 50,000 jobs were created in 2017, buyers are still not confident that Perth is ready to rise again.
“To get people back into the state, more jobs will need to be created … The predominant dependence on the one industry is something that WA is trying to move away from by diversifying economic reliance into other industries. Today, healthcare, construction, retail and education are the industries responsible for the majority of WA’s employment.”
Economy poised to soar
In the next couple of years, however, Perth may turn things around.
“By 2020, the Commonwealth Bank is predicting that the WA economy will expand by 4% based on massive new investment in the resources sector that will be fully underway in two years’ time,” says Shane Kempton, COO of Professionals Real Estate WA and NT.
“The reality is that there has been a major pent-up demand for housing in WA as consumers have put off buying or building new homes due to concerns over unemployment over the past four years.”
Professionals has observed an uptick in sales activity within Perth’s premium suburbs. “With a median house price of around $500,000, Perth is now one of the most affordable major capital cities in Australia to buy a home,” Kempton says.
“Astute property buyers should now move quickly to buy a home in Perth as well as other major regional locations in the state.”
SUBURB TO WATCH
DUNSBOROUGH: Houses slip while units recover
In the 12 months to June 2018, growth in houses and units bucked the trends in the suburb of Dunsborough.
House prices had kept up positive growth since 2013 but fell by 0.7% in the past year. Meanwhile, unit values increased by 6.4% after years of negativity, suggesting a shift in buyer interests.
A favourite vacation spot for locals, Dunsborough has many beautiful beaches, being located on the banks of Geographe Bay. Cafes and shops cater to beachgoers, and at night the suburb lights up with live music and pub activity. Diving, whale watching, swimming and kayaking are popular pastimes, as are hiking and cycling in the Leeuwin-Naturaliste National Park.
Tourism: Dunsborough gets many visitors from all over the state due to its beachfront location
Amenities: Shopping and dining options are abundant for tourists and residents
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