A rise in private spending in one recovering state for infrastructure and resource-related projects is likely to increase the attractiveness to property investors, the results of a new report have found.
There are multiple upcoming projects that focus on the hotel, apartment, retail and resource sector, which could mean great things for WA and’s property market, according to the results of the Perth Private Spending Report by Momentum Wealth’s research division.
The projects include a redevelopment of Westfield Carousel, over $3 billion in upgrades to shopping centres, 11 major hotels, multiple major apartment developments and $108 billion in projects related to the resource sector.
Shaun Strickland, Momentum Wealth research adviser, said these signs all point to the potential for a boon for Perth’s residential property market.
“Whilst the construction and operation of these projects will generate thousands of new employment opportunities and help stimulate Perth’s local economy, the developments will also play a key role in enhancing local amenity, which will in turn help drive demand and property prices in the surrounding regions,” he said.
However, Mr Strickland said property investors should target specific areas where projects will be contributing specifically to “tangible benefits to nearby communities by way of new amenity”.
“With an increasing number of tenants and owners prioritising factors such as proximity to local activity centres in their property selection criteria, projects that deliver these benefits are likely to have a greater influence on demand for property in surrounding areas,” he said.
“Investors who act sooner and identify these markets before buyer competition picks up will be a better position to benefit from ensuing growth, but selecting the right property with the right fundamentals in place will remain paramount,” he said.
The rise of shopping centre projects in particular have been made possible due to changes in WA government policy, which includes the lifting of cap on the maximum size of shopping centres.
“Rising investment in WA’s shopping centres has played a crucial role in driving employment opportunities and buoying the state’s economy during the mining downturn, but renewed interest in the state’s resources sector serves as proof that this sector has and will continue to have a key correlation to WA’s economic performance,” he said
Meanwhile, the increase of spending on resources projects has seen more attention from businesses like Woodside, Fortescue Metals, BHP Billiton and Albemarle; Mr Strickland said attention from these businesses would be a catalyst for wage and employment growth which would then lead to improvements in the property market.
“Whilst these projects collectively create tens of thousands of new employment opportunities, they also hold fundamental importance for the state due to the flow-on effect this has on the wider economy, with wage growth in turn leading to increased levels of consumer spending,” Mr Strickland said.
“The influx of FIFO workers that accompanies these projects can also be a key trigger for the growth of Perth’s property market, with the increase in population in turn leading to a rise in demand for housing and rentals.”