Western Australia’s property sector welcomed the state government's announcement of a $150 million housing investment package for first home buyers and low income earners. The investment is expected to deliver more than 500 new social or affordable homes in the state, along with 70 home refurbishments, for people with low incomes or those at risk of homelessness.

The package comprises $125 million in funding for 300 public housing units, $6 million for 20 regional and 50 metropolitan home refurbishments and $19.2 million for 200 additional shared equity homes delivered in partnership with Keystart.

Keystart has extended its income limits, which increased by $15,000 for single homebuyers and by $20,000 for families, to 30 June 2020.

The state government has also approved an additional increase to Keystart’s borrowing limit by $437.2 million, boosting its lending capacity to $5.3 billion.

Premier Mark McGowan said the package would also create 1,000 construction jobs and increase the supply of short and long-term housing options for people at risk of homelessness.

A series of large-scale residential and commercial projects are expected to get under way in Perth this year with a development pipeline nearing $2 billion in value. Chevron has now commenced construction of the $360 million tower at Elizabeth Quay which will become its new headquarters.

While the overall number of apartments expected to start construction across Perth is expected to fall in 2020 compared to 2019, the collective value of major projects will be a significant boost for the local construction sector.

Market analysis by Urbis and WA Business News identified 10 projects likely to start in 2020, with a collective end value of $1.3 billion, in addition to $560 million of commercial projects. Highlights include Far East Consortium’s $300 million Perth Hub, Blackburne’s $280 million One Subiaco and Edge Visionary Living’s $350 million Canning Beach Promenade proposal in Applecross. Those developments add to a near $1 billion of apartment buildings currently under construction but expected to be completed by the end of the year.

Urbis Director David Cresp said the number of apartments expected to start this year was a continuation of a three-year downward trend and reflected challenging market conditions, but the value of the projects indicated the emergence of several new precincts across Perth.

(Source: Urbis/WA Business News)

Over the course of 2019 and into early 2020, the downward trend in the number of established Perth residential properties listed for sale continued with the number of properties on the market at 12,562, down 24.4% from 16,607 at the same time in 2019. Weekly sales of 595 properties was up over 30% on 457 from the same time in 2019. Equilibrium in the market is generally considered to be in the range of 10,000 – 11,000 property listings, which on the current trend should be reached during 2020. This is a key indicator for the future prospects of the land sales market.

Lot sales data in the UDIA graph below shows a significant fall over the Christmas period which is a normal seasonal occurrence. Importantly sales have picked since mid-January and should return to better levels throughout February. Housing Industry Association data shows that the major homebuilders have their highest number of leads since mid-2018.

West Australians showed a growth in confidence in the second half of last year as growth in retail trade powered to its best result in seven years.

The 3.3% surge in spending in the six months to the end of November trailed only Tasmania (5%) and was well above the 1.9% nationwide result, which was dragged down by sluggish growth in Victoria (1.3%) and NSW (1.6%), over the same period.

While record low interest rates and the Morrison Government’s cuts to income tax have so far failed to light the expected fire under the national economy, the WA result suggests a degree of consumer confidence returning to the west.

According to Australian Bureau of Statistics data, spending was up across nearly all categories, including clothing and footwear, household goods, electronics, alcohol, dining out and takeaway services.

Premier Mark McGowan said WA’s 1.9% annual retail growth in the 12 months to November 2019 was the best in more than three years. “These figures show more West Australians are opening their wallets with strong growth on discretionary items — a key sign consumer confidence is returning,” Mr McGowan said.

(Source: The West Australian)

The rental vacancy rate has fallen 0.1% to 2.4% and the median rent is steady at $350/week. There are currently 6,169 properties available for rent, which is a fall of over 14% from the 7,191 vacant properties at the same time in 2019.

 (Source: UDIA/REIWA)

Western Australia’s annual average employment growth for the 12 months to November 2019 was 0.8% (an increase in employed persons of 10,770). WA’s unemployment rate of 5.8% in November 2019 was 0.1% above the 5.7% in October 2019, but below the 6.5% in November 2018. Once again, the only states with lower unemployment in November were Victoria and New South Wales, both at 4.7%. The national unemployment rate fell by 0.1% to 5.2%.

(Source: ABS)