Perth Property Review
As the Western Australian mining sector slows and projects are approaching the end of the construction phase we are seeing an intrastate and interstate migration of workers to the north west of Perth.
The falling Australian dollar should soften the impact of the mining downturn, the net result will be thousands of mining sector employees moving back to Perth seeking construction related employment most likely in the residential building sector. This will invariably stimulate the new home sector by putting downward pressure on construction costs as builders take advantage of an oversupplied labour workforce. Affordable housing options coupled with the current low interest rate environment will then begin to entice people from the rental market into the owner occupier market resulting in continued demand within this sector for the rest of 2013 and into 2014. Conversely, we anticipate that rental vacancy rates within this sector will gradually increase over the same time frame.
The uncertain global economic conditions are having a negative impact on Perth’s prestige property market. The market below $600,000 is currently very active as owner occupiers jostle with investors and renters for affordable housing. The next six months should see continued strong demand from both renters entering the market and first home buyers. However, softening rental markets and low employment rates will see reduced investor activity resulting in modest but steady capital gains in this lower price band.
Greville Pabst, CEOGreville Pabst, Perth property, Western Australian mining sector, WPB Property Group