It’s been three weeks since the opening of WA’s border and the property industry is keenly monitoring market movement for indicators of what is to come.
The unparalleled effects of the pandemic have rendered even the most informed and data-rich organisations powerless to predict what the property and housing market would look like once the world opened up again.
However, even in these early days, emerging and strengthening trends are signalling a buoyant local economy. With a combined 60 years' experience in property development, Adrian Johnson, Quentin Lau and Ewan McConnell of Summit Developments, discuss the current state of the property market.
While many Western Australians believe property and construction prices are too high, their sentiment is not echoed by their national and international counterparts.
“Since the return of interstate and international travel into WA, the enquiries coming through are already reflecting interest in land and development opportunities,” said Summit Senior Development Architect, Quentin Lau.
“We expect this to continue as our strong local economic performance, current housing crisis and low median house prices offer an incredible investment opportunity.
“There is specific interest in the affordability of land and building costs in comparison to the eastern states,” Lau continues.
Adds Senior Development Consultant, Ewan McConnell: “This attraction to the cost of doing business in investing and developing is in sharp contrast to local sentiment.
“Western Australians have been somewhat shocked at the hiked prices in land and property caused by trade and supply chain shortages; which is only normal after sitting at such comfortable pricing for an extended period of time.
“But these reminiscent pricing expectations could be detrimental to local property owners who will miss an incredible opportunity to develop and reap the rewards.”
In February, the rental vacancy rate hit a record low of 0.7%. The tightening trend of the rental market continues as pressure for housing mounts, with a predicted influx of between 20,000 - 80,000 travellers into WA competing for only 10,000 available homes.
“There is a critical need for more housing in WA and the east coast market is eager to be part of the solution,” said Adrian Johnson, Summit Senior Development Consultant.
“Our local property owner market is caught up in increasing prices but the bigger picture is that Perth is still undervalued and other markets will start muscling in.
“Clients who already own land and are ready to start understanding their capacity to sub-divide and move forward with adding value to their property are in a great position.”
Many local councils in Perth have already rezoned lots to improve efficiency for ‘mum-and-dad’ developers in an attempt to lessen the pressure of the housing shortage.
“Many homeowners might not be aware of rezoning in their suburb, or realise how accessible development is to the everyday person,” Lau advises.
In a bid to ease trade shortages and keep housing construction moving forward, the WA Government recently launched the Build a Life in WA campaign nationally and more recently in New Zealand. This significant investment is yet another indicator that the WA economy is growing - and gaining momentum.
“The government investing in this kind of labour recruitment should be a clear gauge of how buoyant the property market is right now,” points out McConnell.
Whilst external markets show great interest in Western Australia property, local market investors lack confidence. However, the abovementioned trends show a State that is growing and an economy that is strong.
After 697 days of being closed off to the world many haven’t been sure what to expect but several characteristics show only positive signals for the immediate future;
• A job vacancy rate of 60%, making WA an even more attractive option to live in;
• An above-average median salary - whilst the average income for individuals in Australia sits around $89,122, WA's average income sits above this at $98,420, the second highest in the country; and
• A reputation for safety and security - being the most isolated in the city has served Western Australians well in the last two years for safety during the pandemic, resulting in a booming economy.
If you are a landowner in WA and wish to explore your development options, visit summithomes.com.au/develop to get in touch with Ewan, Quentin and Adrian.