Perth Tipped to Become Property Hotspot
By Paul Bennion, Managing Director, DEPPRO
DEPPRO has been operating in Perth for nearly two decades and over the time has produced thousands of tax deprecation reports for investors who have purchased investment properties in the city.
During that time, our company has experienced the different cycles of the Perth property market including the effects of the recent mining boom in Western Australia and subsequent downturn.
The recent downturn has seen investors shy away from the Perth property market as prices have being falling due to an oversupply of properties for sale.
However, there are now signs that the Perth property market has now bottomed and could soon be turbo charged by massive new investment in the State's resources sector.
Mining companies are currently planning to spend $25.5 billion to extend the operations of their iron ore operations in the north of Western Australia.
For example, BHP Billiton recently gave the green light to new $4.7 billion South Flank mine that will create more than 3, 000 new jobs.
Overall, more than $25 billion will be invested by the large mining companies in new iron ore mines in the State over the next few years.
In addition, there is also a major expansion in the State's Gold mining sector while more than $3 billion in spending is planned for new Lithium mines and down- stream processing plants.
This new investment figures do not include massive new investment in the LNG sector with Chervron recently announcing the go-ahead for a $5.1 billion second stage of its Gorgon gas plant in Karratha.
These new projects will create thousands of new jobs very quickly in Western Australia and comes at a time when the supply of new housing construction in Perth at very low levels meaning that the demand for homes could quickly outstrip supply.
This positive outlook for the Perth property market is further underlined by the latest study of States and Territories by the Commonwealth Bank indicates that Western Australia will have the fastest growing economy by 2020.
By 2020, the Commonwealth Bank is predicting the Western Australian economy will expand by 4% based on massive new investment is the resources sector that will be fully underway in two years' time.
This turnaround in the economic fortunes of Western Australia has already been highlighted by rising consumer confidence in the State highlighted by a new survey undertaken by the WA Chamber of Commerce and Industry.
It showed that confidence in the State has soared by more than 15 per cent over the past 12 months with most of the improvement has come in recent months.
Consumer confidence underpins major expenditures such as purchasing a property and this rising consumer confidence should flow into increased activity in the Western Australia property market over the next two years.
The future upswing in the Perth property market is already being signposted for a significant fall in the number of vacant rental properties in the city over the past year.
DEPPRO is also already recording increased activity by investors in the Perth property market during recent months as they buy into the bottom of the property market with the strong potential of reaping financial rewards during the coming years.