Following years of hardship for the Perth property market, investors are set to see some green shoots with massive injections in public and private expenditure tipped to fire up the Western Australian capital.
According to the latest CoreLogic figures,is already showing signs of life growing by 0.4 per cent for the first time in two years as oversupply from the mining boom diminishes.
Troy Gunasekera, branch manager for Property Club in Western Australia, said: “One of the biggest drags on the Perth property market over the past five years has been a massive oversupply in housing stock due to the building boom from 2011 to 2014. However, there is growing evidence this oversupply issue is coming to an end.”
CoreLogic figures show 3,392 newly listed properties were added to the Perth market over the last month, which was down 23 per cent from last year and 23.1 per cent below the decade average and the lowest since CoreLogic listing records commenced in 2007.
While supply in Perth is falling, the city is taking advantage of a larger share of GST funds as well as government projects.
“Billions of dollars in new road and rail infrastructure will be spent in Perth over the coming four years starting from the beginning of 2020.
“For example, there will be six METRONET rail projects under construction in Perth in 2020, creating thousands of local jobs and opportunities for local businesses and transforming Perth’s public transport network,” Mr Gunasekera said.
At the same time, an upswing in resource sector will see billions of new private investment in the state, which is tipped to help the unemployment rate.
“As of September 2019, WA had resource projects in the pipeline valued at an estimated $108 billion,” Mr Gunasekera said.
Combined, Mr Gunasekera believes the green shoots in the Perth economy will help the Perth housing market rebound.
“We are expecting renewed interest in the Perth property market by investors throughout Australia driven by higher rental yields and rising prices, but as in all markets, investors need to be selective to achieve the best possible outcomes,” Mr Gunasekera concluded.
The fall in property values has seen Perth become one of the most affordable capital cities despite being home to over 2 million people.