Why Perth is the less obvious choice for shrewd investors keen to spread a little risk

He said that while he doesn’t expect Perth to take off immediately, he has no doubt it will in the next 12 to 18 months.

“It makes far more sense to be in markets that are yet to see growth, and then capitalise on the full scale of that growth cycle over time,” Mr Beresford told Smart Property Investment.

Population growth

He said that over the last five years, Perth population growth has been at 2 per cent per annum.

“Compare that to a national population growth figure of between 1.6 per cent and 1.7 per cent p.a.,” Mr Beresford said. 

“So, it is definitely building. And the forecasts are for population growth of 2.4 per cent over the next five years.”

That is a “really solid” percentage above the national population growth, which is already at, or close to, record population growth levels.

“So, from a demand point of view, it is going okay at the moment, and it is only going to build into the near future.”

Unemployment, vacancy rates

Mr Beresford said that two of the big indicators he has been tracking very closely in Perth are unemployment and vacancy percentages. 

“Now both of those have been trending down since January last year.

“Unemployment at January last year was at 6.7 per cent, and it had come down to 5.7 per cent by the year-end.”

He said that it actually dipped to 5.4 per cent temporarily around August.

“But a full percentage point drop in unemployment rate is a really good indicator that the economy is moving in a positive direction.”

Jobs growth

Obviously, mining projects are intrinsically linked to Perth, the director said.

“There is about $17 billion worth of mining projects that are scheduled to start in the next three years.

“So, a really solid jobs growth program there, specifically in mining, and all of the support services that go with that.”

Affordability

Mr Beresford added that the “number one thing” Perth has going for it is its relative affordability.

“Both short and long term and compared to especially Sydney, and to a lesser extent Melbourne.

“Price growth is driven by supply and demand and demand is driven by jobs and affordability.”

Amenity investment

Investments in infrastructure like public transport, shops and schools are indicators of population growth coming into an area, Mr Beresford said, because it needs to be there to support the population.

“Within the Perth metro area, a collective $4 billion [is] being spent over the next three years on shopping centre upgrades,” the director said.

“From a public transport point of view, there are four major road projects underway. There is also the development of a light rail system, and in terms of the heavy rail, extensions to five of those rail lines all being rolled out over the next five years.”

He said that Perth might appeal to investors capable of seeing beyond the obvious.

“We don’t think Perth is going to start that growth curve for another 12 to 18 months, but there is no doubt that in the short to medium term, we think there will be some real growth potential there,” Mr Beresford said.

Tune in to hear the full interview with Michael Beresford for more on the investment opportunity in Perth.