PERTH UPDATE – MAY 2019

In the lead-up to the Federal Election, several electorates in Western Australia were identified as important marginal seats, leading to significant infrastructure commitments from both Liberal and Labor. The re-election of the Morrison Government will see more than $1.6 billion in additional investment into critical road and rail infrastructure across Perth and regional WA as part of the 2019 – 2020 Federal Budget. This investment will be focused on congestion-reducing urban projects and crucial regional infrastructure including the following:

  • $207.5m to fund the removal of several key rail level crossings;
  • $115m for the Fremantle Traffic Bridge across the Swan River;
  • $348.5m across three projects on Tonkin Highway;
  • $140m for the Albany Ring Road;
  • $122m for the Bunbury Outer Ring Road;
  • $535m for regional roads of strategic importance;
  • $121.75m on several projects identified in the Urban Congestion Fund; and
  • $35m to investigate and/or develop business cases for further infrastructure projects.

These projects are in addition to the $1 billion Northlink Project which is planned to be completed by the end of 2019. This project has already had a major impact on traffic flows and congestion to the east and north of the CBD, which will only improve when the project reaches completion.

The State Budget released in early May shows a budget operating surplus of $553m, projected to increase to $1.5 billion in 2019/2020. This is the first surplus in five years, delivered two years into the McGowan Labor Government’s term of office. An important initiative included in the budget was an announcement that the government’s low deposit loan provider, Keystart, would temporarily relax income eligibility criteria from 1 July to 31 December 2019. This announcement was welcomed by the industry and will see income limits increased by $15,000 to $105,000 for singles, $130,000 for couples and $155,000 for families. The temporary changes to income criteria follow the McGowan Government's $420m extension of Keystart's loan book in December last year, boosting its lending capacity to $4.8 billion. In 2017-18, Keystart approved a total of 2,169 loans for construction of new homes or purchase of newly constructed homes. Government modelling shows the targeted stimulus will translate into the construction of hundreds of new homes - providing a boost for the housing construction industry.

The established Perth residential market is relatively steady with the number of properties on the market at 16,551, virtually in-line with 16,688 at the same time in 2018. Weekly sales of 505 properties is also in-line with the same time in 2018 at 500 properties. Lot sales data in the UDIA graph below shows a slight upward trend from the middle of April.

The rental vacancy rate is 2.7% and there has been a slight increase in the median rent to $360 per week. There are currently 7,307 properties available for rent, which is a reduction of over 17% compared to 8,827 vacant properties at the same time in 2018. Anecdotally, there is significantly more competition for rental properties particularly in the middle and inner suburbs. (Source: UDIA/REIWA)

Total investment in WA’s 10 largest mining projects is worth more than $21 billion, according to WA Business News. Iron ore continues to dominate the list of the state’s largest projects, with seven projects either likely to commence or underway, worth over $12 billion. The lithium industry has continued its rapid growth, with 13 projects underway or likely worth nearly $6.5 billion. The balance of the major projects is made up of several major gold and mineral sands projects.

Data has revealed increased activity is creating a growing skills shortage in WA’s resources sector, with job vacancies at their highest since February 2014. The April Mining and Resources Job Index report from recruiter DFP shows WA job vacancies rose 1.4 %, compared with a 1.1 % fall nationally. DFP attributed the majority of this encouraging jobs market to the iron ore sector, which is driving growth in all areas including extraction, transportation and export. The price of iron ore has recently risen to five-year highs on the back of supply disruptions in Brazil.

Employment growth for the 12 months to March 2019 has seen a modest rise in the number of people employed of 7,100 or 0.6%. WA’s seasonally adjusted unemployment rate rose 0.1% to 6.1% in April. This has fallen from 6.5% in April 2018. (Source: Australian Bureau of Statistics (ABS))


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