EXPECTATIONS of a slowdown in property market activity may come to pass, according to Frank Allen, but talk of a “crash” is not on the Westpac property markets director’s list of probabilities.
In a generally positive address to a recent Property Council of Australia (WA branch) luncheon, Mr Allen said the residential market had eased to more normalised levels, but that the outlook was for a continued healthy market.
“The residential market could not sustain itself at the growth levels it was experiencing. It had to slow, but will remain active,” he said.
Recently released ABS statistics show a net migration to Western Australia of 19,208 people during 2003, second only to Queensland, with a direct and positive impact on the residential housing market expected.
In relation to office space, Mr Allen said that vacancy rates had risen in all States in the past three years, which had the effect of increasing incentives and decreasing rental rates.
“However, with positive job growth, net absorption will move back into the positive area,” he said.
And while retail spending had steadily increased over the past three years, with retail vacancies at 10-year lows, spending was expected to slow over the next couple of years, Mr Allen said.
“This will cause some potential pain for less populated areas, but there will still be positive movement,” he said.
Despite a slowing of demand, another sector he expects to remain active is industrial land, which is closely linked to the nation’s overall economic performance.
State Development Minister Clive Brown recently said WA’s economy was the fastest growing and best performing State economy in Australia, and the strong links between economic performance and property performance indicated a continuing positive outlook.
