Perth, Western Australia

On 23 October, the McGowan Labor Government announced a 75% stamp duty rebate, capped at $50,000, for off-the-plan apartment buyers. This stimulus package is designed to create jobs and deliver greater housing diversity throughout the metropolitan area.

The rebate will be available for two years to any purchaser who signs a pre-construction contract to purchase a new residential unit or apartment in a multi-tiered development. There will be no cap on the purchase price and multiple rebates will be available to the same applicant.

Of particular note was the state government’s inclusion of its 7 % foreign buyer surcharge as eligible for rebates, a shift that potentially creates a value proposition for overseas investors considering Perth over other Australian cities.

In another potential boost, the federal government has reinstated Perth's regional city status for international students, coming into effect on November 16.

This is likely to make Western Australia a more attractive destination for international students after changes to visa and migration settings. The change allows international students to access incentives to undertake their studies in Perth.

"Perth will be an option for international students, as they will now be eligible for an additional year in Australia on a post-study work visa," Federal Finance Minister Mathias Cormann said. "That additional year of post-study work will not only benefit students with work experience, income, and post-study financial stability, but also help drive stronger economic growth."

Western Australia accounted for over $160 billion or more than 43% of Australia’s total exports in 2018/19. This was largely due to an increase of 26% in the value of minerals and petroleum/LNG sales.

The Federal Government has given the green light to exploring for untapped oil resources in Western Australia’s north that could create hundreds of thousands of jobs and provide fuel security for the nation.

Federal Resources Minister Matt Canavan announced on 14 October that the Federal Government is providing $5 million for Geoscience Australia to carry out an exploratory drill at Waukarlycarly in the South West Canning Basin. The drill will be conducted with the State Department of Mines, Industry Regulation and Safety.

Geoscience Australia estimates Canning Basin holds 43 billion barrels of recoverable shale oil, which is almost 50 % more than the current 29 billion barrels globally recovered. The estimate for the entire reserves in the Canning Basin is 860 billion barrels, however not all of that will be able to be recovered. Additionally, there are recoverable shale gas resources of 390 trillion cubic feet with additional potential for tight gas (natural gas produced from reservoir rocks) resources of 48.5 trillion cubic feet.

Senator Canavan said the site would be a “game changer” for the State economically but also for the nation as a whole.

“If this is as large as our geologists expect it to be it will mean hundreds of thousands of jobs for WA,” Senator Canavan said. “Western Australia can well see how important the iron ore and gas industries are, so if we could add oil to its already world-beating industries it would be the economic trifecta.”

“It’s an economic step up — it’s a game changer — and it will create another boom the likes of which we have seen in iron ore and gas.” Senator Canavan said the resource had the potential to spark a manufacturing boom similar to what was seen in the United States after the Permian and Eagle Ford basins were discovered which is why it would create so many local jobs.

WA Minister for Mines and Petroleum Bill Johnston said the drill was an important joint project for the State and Federal governments.

“Access to data from this drill site, and the preceding seismic survey, improves exploration efficiency over a much broader area and can result in new projects that will create jobs for Western Australians,” he said.

Chamber of Minerals and Energy of Western Australia Chief executive Paul Everingham said the drill had “huge potential”.

“This is a big vote of confidence from the Federal and State governments in the potential of the Canning Basin,” Mr Everingham said. “If tapped, this could become a globally significant hydrocarbon province.”

(Source: The West Australian)

The established Perth residential market has seen a continued reduction in supply with the number of properties on the market at 13,830, down 15.1% from 16,296 at the same time in 2018. Spring is traditionally a popular time of year to market homes in Perth, so these figures indicate a genuine strengthening of the stablished home market. Weekly sales of 502 properties was up on 462 from the same time in 2018.

Lot sales data in the UDIA graph below shows a continuation of the ongoing increase in sales volumes since August this year.

The Research4 National Land Survey for the September quarter 2019 shows lot sales in the Perth market improved by 19% on the previous quarter to 466 per month. The median lot price fell by 1.4% to $216,000.

(Source: Research4

The rental vacancy rate has fallen slightly to 2.6% and the median rent has also fallen slightly to $360 per week. There are currently 6,184 properties available for rent, compared to 7,484 vacant properties at the same time in 2018. This is a fall of over 17% which is significant in isolation but even more so when viewed in combination with the 15% fall in established homes for sale. (Source: UDIA/REIWA)

Western Australia’s seasonally adjusted unemployment rate fell by 0.1% to 5.7% in September. Once again, the only states with lower unemployment in August were Victoria and New South Wales at 4.7% and 4.5% respectively.

(Source: ABS)

1 See important disclaimers at the end of this document