With Perth’s median house price at $481,500, Western Australia’s capital is comparatively cheaper than other state capitals in the country. And with signs of recovery continuing to breed confidence in the market, buyers are looking to purchase sooner rather than later.
Buyers are further encouraged by the intentions of the WA state government to pump $17 billion into the local economy. Earmarked for infrastructure projects like roads, transports and new community centres, $17 billion goes a long way to growing jobs and restoring confidence in the economy.
Some of the projects include:
- $2.75 billion extension of the Metronet railway network over the next eight years1
- Rail projects adding more connections between Perth Airport and the CBD
- 40 apartment projects and $4 billion worth of planned upgrades to shopping centres in the pipeline
On top of the benefit of extra jobs, properties located close by to these new projects will inevitably see some price growth. For towns that have new train stations, apartment complexes or shopping centres, the liveability and demand for property will drive price growth and both owner-occupier and investment interest. New lifestyle and entertainment attractions can add premium stock onto the market and attract high quality investment groups and tempt people away from inner-CBD living towards suburbs like Rockingham and Baldivis.
After quite a few years of declining median prices and stagnant growth, an injection of investment is just what the WA economy needs at just the right time. Infrastructure projects don’t all happen at once, which is actually a good thing. Spreading out the spend over the course of 4-5 years will ensure sustainable job growth and price growth in the property market.
What the WA government is keen to avoid is an artificial bubble which doesn’t support the foundation of the market. For investors, it’s worth looking into some of the new opportunities that this investment brings. Especially in the areas earmarked for new infrastructure, and transport connections.
References:
Perth ripe with future property buying opportunities, Ben Lamers. (June, 2017)
The Perth median house price is currently sitting at $481,500 (CoreLogic, May 2017) and at a level that in comparison to other states of Australia should tempt buyers to consider making their move sooner rather than waiting for the market to gain momentum in its recovery. A decrease in house prices can create a significant drop in market confidence, however, with evidence of a number of changes occurring within Perth, which will ultimately affect property prices, astute buyers should be identifying future potential areas that will enjoy an upswing in values.
Major changes are proposed for Perth by the WA State Government, with a plan to invest $17 billion in infrastructure and the aim of creating communities offering new living and business opportunities, public open spaces, transport, facilities and lively places for people to enjoy. With the development of these new infrastructure projects will come added value to property, and we envisage will turn declining property prices into strong steady growth.
The $2.75 billion extension of the Metronet railway network over the next eight years will have a significant effect on the Perth property market. In this project, it is proposed to create a new railway line that will track from Morley to Ellenbrook and also an extension of the existing Clarkson train line up to Yanchep. In addition to these works, there will be easy access to Perth Airport created with the completion of the Forrestfield train line. The development of these rail projects will result in the properties located within those areas enjoying greater access to the Perth central business district. In projecting a future vision of where the smart buying opportunities lie, we have no doubt that the demand for properties in and around those areas will increase over time and with any increase in demand, comes an increase in price.
Planned apartment and shopping centre developments will deliver tangible benefits to locals as they create a place where people will want to spend their leisure time as they will provide a wide range of entertainment and lifestyle options, as well as restaurants and retail shops. Perth has 40 apartment projects and $4 billion worth of planned upgrades to shopping centres in the pipeline. These large-scale plans will not only form more vibrant and connected communities but will also open the door to thousands of local job opportunities. Similarly, as with Metronet, we believe the properties within proximity of these new development sites will become more sought-after and this demand will be reflected in an increase in values.
Below is a table outlining some of the apartment and shopping centre developments planned for Perth, their locations and the estimated dates for completion.
Importantly, as with any property buying decision, it is not a case of just buying anything and expecting to make money. Careful and strategic property selection is paramount and by choosing the right property in the right location you will reap the greater long-term benefit and return on your investment.
