With the Sydney, Melbourne and Brisbane real estate markets all in full swing over the last 12 months we ask the hard question – Is the WA boom over or is their room for the astute investor?
Less than 6 months ago, WA boasted the nations best performing economy.
6 months later WA has the same credit rating as Tasmania.
What’s driving the WA real estate market?
- The significant levels of investment associated with the mining boom in WA have now come and gone.
- In 2014 WA built the largest number of new homes on record, according to Dale Harvey from the HIA.
- WA is still seeing strong real estate activity, housing construction and overall activity in the financial sector.
- WA is still by far Australia’s leading state for population growth, with an annual growth rate of 2.53%.
- At 4.9%, WA’s unemployment levels are still relatively low compared to other states.
What’s ahead for the WA real estate market in 2015?
- Times are tough in WA, according to Dale from the HIA, due to the fact that so much investment has been “sucked out of the economy”.
- According to Dale, it will be a long time before we see another investment boom like the one we have just been through.
- We are not going to see the economic growth and therefore income growth that we have seen over the last 5 – 10 years, over the next 5 – 10 years.
- We are also seeing markets with sharp falls in property prices and vacancy rates.
- Investors can expect price declines throughout 2016 and 2017 – with Perth’s median house price forecast to decline by 10% in real terms over the next 3 years, according to John Edwards from Residex.
- Tourism is on the rise with a large number of Chinese tourists coming into WA.
15 WA suburbs set for growth in 2015 for under $420,000:
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4 additional WA suburbs set for growth in 2015 for under $420,000:
Leading infrastructure projects in the works for WA:
- $54 billion LGN projects – Gorgon, Wheatstone and Prelude.
- $9.5 billion Roy Hill iron ore project.
- $5.6 billion mixed-use Perth City Link urban renewal project.
- $300 million Joondalup Shopping City.
- $105 million Oceans Keys Shopping Centre.
Important population statistics for WA:
- Forecast population for 2015/16: 2,713,000.
- Forecast population growth for 2015/16: 2.9%.
- Population growth hotspot: Serpentine-Jarrahdale.
- Migration trend: Net interstate migration flow.
Who’s been buying property in WA in 2014?
First home buyers have re-entered the WA market.
Investor activity still remains healthy, with lending for residential activity similar to levels seen during the mid-2000s boom. In fact, investor activity in WA is now in line with pre-GFC levels.
WA’s 7 most under supplied real estate markets in 2014:
- Bentley South (units)
- Salter Point (units)
- Wilson (units)
- Subiaco East (units)
- Bateman (units)
- Yokine South (units)
- Morgantown (units)
Warning: Pumped On Property are not investment advisers. This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. All readers should seek independent and qualified investment advice before purchasing a property.