Perth Investor Update June 2019

The McGowan Government continues to implement a wide range of initiatives and infrastructure projects outlined in the recent state budget. The most significant of these are focused on the METRONET rail policy implementation and associated areas. Feasibility studies and planning are progressing on a wide range of initiatives which should lead to substantial expenditure across a broad industry spectrum in the short to medium term.

At the May 2019 Australian Petroleum Production and Exploration Association (APPEA) conference in Brisbane, Premier Mark McGowan reaffirmed the West Australian State Governments appeal to business across the nation to relocate to WA to take advantage of the State’s cheap, reliable and abundant gas supply. The domestic gas reservation policy introduced by Labor in 2006 ensures that WA enjoys the cheapest wholesale gas supplies in Australia. At the same WA has also avoided the supply shortages that have crippled some east coast industries. The Premier outlined the LNG Jobs Taskforce, the first of its kind in Australia, with strong industry and government collaboration. The primary aim of the Taskforce is to establish WA as a global LNG hub servicing Australia and the broader Asia-Pacific region, to create new investment opportunities and employment in the sector. The McGowan Government has prioritised growth in WA’s LNG industry, and the recent State Budget included $10 million to develop a world-first microscale LNG plant, as part of an LNG Futures Facility in Kwinana.

The established Perth residential market has seen a slight improvement with the number of properties on the market at 15,892, down from 16,340 at the same time in 2018. Weekly sales of 587 properties is also an improvement on 489 in the previous week and well up on the 511 the same time in 2018. Lot sales data in the UDIA graph below continues to show a slight upward trend from the middle of April.

The rental vacancy rate remains at 2.7% and the median rent is steady at $360 per week. There are currently 7,380 properties available for rent, compared to 8,701 vacant properties at the same time in 2018. (Source: UDIA/REIWA)

Employment growth for the 12 months to April 2019 rose by 8,314 or 0.6%. Of greater importance is the increase in full-time employment of 43,574 over that period, offsetting a fall in part-time employment of 35,260. This points to a shift towards full-time employment as excess capacity in the employment market is absorbed. WA’s seasonally adjusted unemployment rate rose 0.2% to 6.3% in May. This has fallen from 6.5% in April 2018. (Source: ABS)

1 See important disclaimers at the end of this document