by Nick Allingame UDIA WA President www.udiawa.com.au/
The downturn in Western Australia’s property market has been more protracted than many of us expected. However, positive market sentiment is certainly gaining momentum.
Premier Mark McGowan was recently quoted in the media advising people in WA to ‘buy a house now because the good times are coming back’.
Those ‘good times’ Mr McGowan referenced pointed to data reflecting an 1.1% expansion in the domestic economy in 2017-18 after four years of decline, along with the GST reform package that will provide a much needed boost to WA’s economy.
Good news is also emerging from the mining sector, particularly as lithium production in WA expands exponentially.
Opposition leader Mike Nahan was similarly upbeat in his speech at last week’s UDIA Industry Luncheon on achieving growth in WA. Mr Nahan said he had ‘great faith in the future growth of Western Australia for a variety of reasons, beginning with the resource sector’. He noted the resurgence in gold, iron ore, nickel and lithium production and said the sector was already starting to experience a shortage of workers.
Further reinforcing this positive outlook, Bankwest Senior Economist Alan Langford said he was ‘quietly confident’ there would be a flow-on benefit to WA’s property market thanks to the growth in the mining sector, potentially in six to nine months.
This boost in mining will attract people to the state, which in turn will result in increased demand for land and housing.
The UDIA is confident that a recovery is imminent given our recent analysis of Landgate settlement data which shows positive activity in the top and middle sectors of the market. Our research indicates that premium housing areas in Perth such as Mosman Park and Cottesloe have started to perform well, with strong housing demand and limited supply driving price increases.
In fact sales of properties prices $1 million and above in the central metropolitan region have recorded positive annual growth for both the March and June 2018 quarters.
In the central region there was 4.7% annual growth in the number of sales above $1 million during both quarters.
Turning to areas such as Belmont, Victoria Park, Canning, Fremantle, East Fremantle and Bayswater, indicators point to investors taking up small scale development opportunities in anticipation of the market lifting.
For example, Fremantle settlements for lot sizes between 751sqm and 2000sqm have had three consecutive quarters of solid growth, with a significant 31.3% increase in the June 2018 quarter.
Given all of this evidence, I am confident that WA is on a positive path heading into 2019.