Figures put Perth property ahead

The Perth property market is arguably leading the country in both the residential and commercial sectors.

As the rest of the country suffers from stagnant or deflated median house prices, the median house price in Western Australia rose 19.1 per cent to $297,000 in the full year to June.

The median price of unit and apartment sales in Perth was $230,000 in the June quarter, up 16.8 per cent on the previous year.

Regional WA is also booming for property, with the median house price in the best performing regional city, Bunbury, growing 39.8 per cent.

Land values in WA also continued to grow, up 16 per cent to $138,000.

Real Estate Institute of Western Australia (REIWA) president Greg Rossen said residential real estate in WA had entered a new growth phase.

“The real estate market in WA has not only resisted the interstate slow-down, the local market has actually stepped up a gear,” he said.

“All sectors of the WA real estate market experienced strong growth in property values, and the last quarter saw a coming together of positive market influences, including continuing high levels of property sales to investors and first home buyers, and increased numbers of households trading up to more expensive locations.

“The WA real estate market continues to benefit from an exceptionally strong state economy, which is drawing in large numbers of interstate and overseas migrants.

“Western Australia also continues to offer some of the most affordable property investment opportunities in Australia.

“There are no signs of a weakening in the WA real estate market and there is enough positive momentum for the current strong rates of growth in property values to continue for the remainder of the year.”

Perth’s office leasing market has caught many by surprise during the past year, with Property Council figures showing a record take up of office space in the past six months. Vacancy rates in the CBD plummeted to 9.5 per cent, giving it the strongest vacancy decrease of any Australian CBD office market.

The long moribund office market has turned around during the past year, with vacancies going from 13.9 per cent to 9.5 per cent in 12 months, just shy of Perth’s lowest recorded vacancy rate of 9 per cent achieved in July 2002.

Perth’s CBD absorbed 51,170 square metres of space in the past six months, the equivalent in space to more than the capacity of the Woodside Building.

This figure is easily higher than any six-month period of net absorption since the Property Council began compiling the statistics in 1990.

This has triggered an increase in rents, with the market turning in the last year from a tenants’ market to an owners’ market.

It has also put pressure on existing office space, with several proposed office developments in the CBD vying for major tenants in the market.

There are four privately owned sites in competition with each other to secure tenants in the office tower race: Multiplex and Griffin Group’s 125 St Georges Terrace; the Pivot Group’s 100 St Georges Terrace; Hawaiian and Multiplex’s Bishops See; and Luke Saraceni’s Raine Square.

The government-owned site at 140 William Street has just opened for expressions of interest and is expected to fetch between $20 million and $25 million with a guaranteed 22,000sq m government tenancy.

The Old Treasury buildings are expected to also secure government tenants as part of a redevelopment, and architectural plans have already been released for this site.