THE Property Market Monitor compiled by LJ Hooker predicts that WA will be the leading economy in Australia by the middle of this decade, despite the serious impact of the post-Asian crisis.
The strength of the resource sector is highlighted as a major support for investment in the property sector.
Despite this, the weakness in State Government finances is identified as likely to lead to some deferment of public infrastructure projects.
The BIS Shrapnel LJ Hooker Market Monitor reveals a negative net migration to WA, however it’s expected that the North West Shelf Joint Venture will increase migration to the State in the medium term.
BIS Shrapnel’s director of building services, Robert Mellor, said interstate migration and overseas migration were both very important to the property market.
“WA is getting about 13,000 people from overseas a year and it’s a higher share of overseas migration for its share of total population,” he said.
“Net interstate migration fluctuates a bit.
“In good years where there’s more mining activity you get around 5,000 per annum coming into the State. In the last few years there’s been a net loss.
Mr Mellor said these movements, particularly if they happened quickly, could create demand pressure in the property market.
“Periods of higher population inflow tend to be associated with price growth,” he said.
The report suggests WA’s economic growth is forecast to be around 4 per cent in 2003-2004: “Due to the relative weakness of dwelling and non-dwelling building construction, sluggish employment growth and a lack of new export capacity.
“However with business and particularly resource investment picking up … we are forecasting GSP growth of just under 6 per cent in 2004-05 – well above the national average.”
The report on the rural sector in WA is less bullish, despite the fact the State has avoided the drought conditions that are afflicting most of the eastern States.
“Oilseeds (particularly canola) – the State’s second largest agricultural commodity – have better price prospects and this will provide an added benefit,” the report says.
“The State’s large wool sector will also help underpin the rural sector’s fortunes over the medium-term.
“Overall the State’s rural sector had moderate to good prospects over the short to medium term.”
