The Western Australian division of the Property Council of Australia has warned that the shortage of property across all sectors in the market will not ease for at least two years.
The Western Australian division of the Property Council of Australia has warned that the shortage of property across all sectors in the market will not ease for at least two years.
WA's current shortage is a result of the boom in the market, which is matched in size only by the demand peak experienced during the 1980s, the council says.
Investment in property infrastructure with record land developments in the pipeline, means the shortage is unlikely to subside until late 2007, according to Property Council of Australia (WA Division) Executive Director, Joe Lenzo.
The full release can be read below.
The shortage of property gripping all sectors of the property market in Western Australia will not ease for at least two years, according to the Property Council of Australia.
Property Council of Australia (WA Division) Executive Director, Joe Lenzo said the shortage was a result of under-investment in property infrastructure in the mid 1990's and the surprising resilience of the WA property market.
"The property sector is battling to keep up with demand for property due to the most acute period of stock shortage in WA in over 20 years. Not since the late 1980's have all sectors of the WA property market boomed at the same time.
"Most industry commentators expected the current cyclical peak to have occurred in 2003 but the market in 2005 has taken the property sector by surprise and record high levels of property sales and leasing activity were achieved.
"During 2005 real estate transfers in WA rose by 10.6% on the previous year, the total value of building construction rose 13.3%, and a surge in demand for CBD office rental accommodation resulted in a 31.7% reduction in the office market vacancy factor.
"The shortage of property is also part of the broader pattern of infrastructure shortages gripping the State.
"However a sharp increase in property infrastructure investment is underway. In 2004-05 a record 20,200 new land developments were approved. Contributing to this was a 30% rise in the number of approvals for new industrial land and an 11% increase in approvals for new residential land.
"A similar pattern is evident in the commercial office development sector, particularly in the Perth CBD. During the course of 2006 the CBD is anticipating the commencement of at least two major office developments.
"But the expansion in land supply and the commercial office developments will take up to two years to ease the property shortages currently prevailing in WA. This suggests that property in WA will continue to be competitively sought by investors and owner occupiers, into the New Year", said Mr Lenzo.
