April 21, 2019 | 05:14 PM

Property & Home

26.07.2018Property market round-up: Focus on Western Australia

This article will look at the uncertain state of the property market in Perth - as well as problems beyond the city limits.

Western Australia is the largest state in the country by area, and vast swathes of it are filled with empty land. But that doesn’t mean property prices are irrelevant. The population of Western Australia is very urbanised and is clustered around the cosmopolitan metropolis of Perth on the state’s southwest coast. This article will look at the uncertain state of the property market in Perth – as well as problems beyond the city limits. 

Perth: An overview 

Any study of the property market in Western Australia should take Perth into account first. Like many state capitals in Australia, it’s a hub for activity in the state – which means there’s always a lot going on. In terms of property prices, though, it’s not a great place to be for those who bought a while ago.

Between June 2014 and March 2018, property values dropped by -11% – which is a worrying trend for investors and owners in the city. Unusually, though, this isn’t associated with the other negative economic metrics that many people might expect it to be. Figures released last year showed year-on-year growth in job adverts released across the state, which of course means that firms are hiring more. Perhaps, then, the issue is that everyone is simply waiting for the property market to start showing signs of health before they make their purchases – but nobody wants to be the first to take the risk and act.

Too many apartments

Urbanisation is the name of the game in Australia, so it’s no surprise that Perth is full of flats. Worries about too many new apartments for singles, couples or those on lower incomes have hit every major Australian city from time to time, although it seems like some of the country’s other capitals have managed to avoid problems thus far. Perth, however, has not.

Construction firms have apparently gone too far when it comes to apartment buildings, and there’s now a real risk that they simply won’t sell. At the start of 2017, figures showed that across three major Perth districts there were over 500 apartments languishing on the market – with over 1,100 more about to be added.

As a result of this overeager building programme, those behind the new constructions are trying to incentivise purchases by offering everything from five-figure discounts to swanky appliances for the city’s many new, empty kitchens. It’s still too early to tell whether this will ease oversupply problems in the future.

The wider state

But there is more to Western Australia than Perth, and it’s worth looking at other towns and cities in the region to see what’s going on there in terms of property prices. For those who feel like Perth isn’t an option due to low values and an uncertain market, moving out to another location may seem like a wise move.

Sadly, the market here is not a reliable source of positive news either. The smaller towns outside of Perth have their ups and downs, and there have been overall price rises recorded in recent years. But when the downs hit, they hit bad.

Figures released last year showed that certain towns in the north of the state were experiencing double-digit declines per quarter. Broome, a town on the northern coast, saw a drop of almost 13% in median property values. While some towns fared better, moving out of Perth is certainly not a guaranteed way to solve low house price problems at the moment.

The property market in Western Australia isn’t looking great. From the issues surrounding apartment new-builds in the state capital to a simple lack of confidence in the market, prospects for the state are not yet on the rise. The key hope for investors, property owners and soon-to-be first-time buyers, then, is that the state’s market begins to improve as 2018 runs on.

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