Over the last month, Jerry Collova; Director of PEB Group has spoken to quite a few people regarding Western Australia’s current economic climate and the future...
… Here are his findings and why we are starting to think that the WA market should start improving around the second half of this year, slowly moving away from the bottom of the cycle.
- Enquiry rates from NSW into properties in Perth have increased by 30%
- Enquiry rates from China grew nearly 10 percent last year and are expected to increase this year due to buyers being priced out of Sydney and Melbourne markets
- Some big ‘developers’ are now acquiring land in Perth – this is usually a good indicator that we are at, or close to bottom of the market
- Resource prices are increasing – margins are bigger and Iron Ore mines are now employing as they want to get to full capacity. According to Perth Now, spot prices of Iron Ore jumped a massive $US5.61 to $US92.23. It is the first time the price of the steel making commodity has topped $US90 a tonne since August 2014, and brings this year’s price rise to more than 18 per cent.
- Larger mining companies are now looking at employing to 100% capacity
- History shows that when production goes to 100% capacity it generally hits retail some 2-2.5 years later but with housing that should only be around 12 months later
- Perth’s median house prices are increasing and have done so by nearly 2 percent in the 3 months to Dec 2016
- Due to these indicating factors and anticipated supply pipeline to dry up (excluding apartments), this may see some positive movements and confidence back in the market in Q3 of 2017…
*This article is for general information purposes only. It is not intended as financial or investment advice and should not be construed or relied on as such. Before making any commitment of a financial nature you should seek advice from a qualified and registered financial or investment adviser.
PEB Group is a complete financial planning advisory service for Perth families. Offices are located in Inglewood and Willetton, Perth, Western Australia and offer service in - Financial Planning · Finance Broking · Property Management · Property Sales · Property Investment · Development ·
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