The Weekend West
Analysis by Research4 Director Colin Keane for the Urban Development Institute of Australia Western Australia (UDIA WA) has shown the WA property market is on the cusp of recovering.
Speaking at a UDIA WA luncheon at Crown Perth last week, Mr Keane told a crowd of over 350 property industry professionals about the current state of play in the local market.
His presentation provided some light at the end of the tunnel as he outlined how the Perth land market was beginning to show small signs of improvement. He said demand would benefit from
a further lift in employment numbers.
According to Mr Keane’s analysis, employment growth in WA has been lifting since mid-2017. Given that there is commonly a two-year lag between job creation and an uplift in land sales, Mr Keane said WA should see a positive impact soon.
Mr Keane also highlighted several key areas that had impacted land sales across Australia over the past 24 months.
He said the Banking Royal Commission and recent Federal Election had spooked the market, but those were things property developers could not control.
“With the recent Federal Election now put to bed, the current policies will help to settle the market,” he said.
Mr Keane said Perth and Queensland were the only two states in the country currently undervalued in terms of land prices.
“Land follows house movement,” he said. “If the housing market goes up, land prices will usually follow that trajectory,” he said.
UDIA WA CEO Tanya Steinbeck said the current downturn had certainly dragged out much longer than anticipated.
“It has been a long road to recovery,” she said. “However, in the last few months we have seen several positive actions we hope will provide much-needed stimulus and assist more buyers into the property market.
“Th e outcome of the Federal Election, the introduction of the First Home Loan Deposit Scheme and the latest rate cut, along with more reasonable retail lending criteria, should all help to support a market recovery.
“As Colin said in his presentation, Perth land prices are currently representing excellent value for money, potentially $5000 under market value at this point in time.
“Given interest rates have been cut even further and with State Government incentives such as the relaxation of Keystart eligibility criteria, those thinking about purchasing could get themselves an excellent deal.”
Keystart has already seen a 50 per cent increase in enquiries in the last month since the new eligibility criteria were announced, which Ms Steinbeck said was a good sign of things to come.
“WA’s recent upgrade to an AA1 credit rating is another positive sign for the WA economy,” she said.