Perth to go from decade low to double-digit growth
After nearly a decade of lagging behind the rest of the nation, the Perth property market is finally set for a year of growth, albeit from a low base, an industry expert has said.
During a recent episode of The Smart Property Investment Show, Archista’s chief economist, Dr Andrew Wilson, revealed the drive behind a strengthening Perth market.
The Western Australian capital, which once boasted higher house prices than Sydney, has languished over the past decade, with the fall of the mining boom leaving a deep wound.
However, with the price of commodities continuing to rise, the Perth market is beginning to show signs of recovery, albeit from a low base.
“More than any of the other capitals, people just left Perth in droves when the mining boom finished. And of course that was all about the fly in, fly out. That left a lot of investors with vacant properties really for a long period of time. And rents fell to 10-year lows there, but it certainly rebounded now,” Dr Wilson said.
He also underscored the strength of Perth's rental market, noting that it has become one of the tightest markets in the country.
“It’s tough to get a rental property and, again, I think also the safe haven perception through coronavirus to those states such as Queensland, and Western Australia are attracting people into those areas in higher numbers,” Dr Wilson explained.
The chief economist also said Perth is building more new homes than Brisbane at the moment, which is “quite astounding”.
“So, they’re taking advantage of that HomeBuilder policy from the government,” Dr Wilson said.
“It’s always been a market, because of its perceived low value, comparative value compared to others, that has enhanced building in that market. So, plenty of upside for Perth.”
But. despite showing signs of life, the capital remains a long way behind the rest of the country.
“The Perth market is the furthest behind its previous peaks of any of the capital city markets,” Dr Wilson said.
“Now, Perth median prices are still around 10 per cent lower than where they were seven years ago.”
The rebound is slow despite the low interest rates and higher incomes over the past seven years.
“There’s been a very strong rebound in population growth migration, net migration into Western Australia,” Dr Wilson said.
“I think that it’s not an outrageous prediction, that we may see up to 10 per cent price growth in Perth. But that’s only going to bring us back to where we were seven years ago. So, it might even go higher than that,” Dr Wilson concluded.
More from this writer:
-
Highrise of lies: Gold Coast developer cops fines over GST fraud
-
4 danger signs property investors need to watch
-
Brisbane Olympics set to boost commercial property
-
Landlords forced to ‘carry the can’ following Victoria’s lockdown
-
How this first-generation Aussie bagged a $2.5m portfolio by 32
-
How this investor is turning a marriage breakdown into a fresh opportunity
-
The best and worst rental yielding suburbs revealed