A resurgence in the jobs market in Western Australia will lay the foundation for a recovery in the local property market, one industry commentator says.
CEO of the Peard Real Estate Group, Peter Peard, says the fall in WA’s unemployment rate is likely to produce a lift in consumer confidence.
The latest ABS employment figures show that WA’s unemployment rate fell to 5.5 per cent in May, the second lowest in Australia after New South Wales at 4.8 per cent.
“Western Australia has seen a sustained growth in full-time employment since the start of 2017, with 30,500 new full-time jobs being created in the state,” Mr Peard said.
“It follows a very tough period in the jobs market following the downturn in the resources sector when 48,600 full-time jobs were lost in WA during the period May 2015 to December 2016.
“The fear of job losses has been a major factor that has undermined consumer confidence in the WA property market over the past two years.”
Mr Peard said property values have been falling as a result.
“People have been reluctant to take out a mortgage for fear that they may lose their home due to being retrenched. Property investors have also retreated from the local real estate market because of this fear factor,” he said.
“However, these improving employment figures will result in improving consumer confidence in the property market.”
Mr Peard said the recovery is likely to be felt in the spring selling season.
“A growing number of property buyers now understand that prices have now bottomed and more people are deciding to buying property before they start to rise,” he said.
Mr Peard also said there is more good news on the jobs front in WA.
“The new Labor state government is committed to a large infrastructure program that includes Metronet that is likely to boost further job creation in the local economy. In addition, the resources sector is showing signs of recovery, with major new investment planned for a new generation of lithium mines in the state.
“2017-2018 is shaping up to be a positive year for the Perth property market and once buyer activity accelerates, we should see a lift in the overall Perth median house price during 2018.”