Western Australia provided the strongest returns for direct property investors over the year to September 2013, according to a new report.
Results from Investment Property Databank (IPD) show that the Western Australian property market outstripped the national average across a number of measures, according to Charter Hall.
Head of Charter Hall’s direct property division Richard Stacker said that while WA’s economy has moderated as the mining industry begins to transition from construction to output phases – a number of factors that contributed to Perth being Australia’s strongest performing office market over the past decade still remain.
“Population growth in WA was double the national average over the past year, and the current unemployment rate of 4.3 per cent is by far the lowest of all states,” he said. “It’s true that WA’s employment growth has slowed since 2012 as the mining boom crests, but at 1.4 per cent for the year to October 2013 it remains well above the 0.8 per cent recorded by Australia as a whole.”
The report showed total returns in Perth over the year to September outperformed the national benchmark. Perth’s office market returned an average of 11.6 per cent and the capital’s retail market returned 10.7 per cent. The national benchmark for broader property was nine per cent.
September figures for industrial property in Perth are yet to be finalised, but according to Charter Hall, growth over the year to June 2013 was 15.4 per cent.
Mr Stacker said he expects self-managed super funds (SMSFs) to continue to influence Perth’s property markets moving into 2014.
“The SMSF sector is the fastest growing area of the Australian superannuation industry. SMSF investors have an appetite for direct investment and a desire for control and transparency. Direct property investment provides self-directed investors with quality assets with lower gearing, conservative payout ratios and increased transparency,” he said.