Perth Property Investment

Perth property investment conditions will be largely influenced by the WA government's recently released "Capital City Planning Framework". With a projection of 2.2 million people likely to be living in the region by 2031, a growth of approximately 33 per cent, the Perth property market is set to continue on a path of major change. However, many forecasters believe that investment conditions in the Perth property market are in line for another upswing in the not too distant future. This factor is tied closely to Western Australia's continued high population growth and its second mining boom.

Following Perth's phenomenal growth over the last 10 years, rental growth in Perth is expected to outperform most other states in 2012 and 2013.

Western Australia has the fastest growing population of all the states or territories, with annual growth averaging 2.6 per cent. It is estimated that the Western Australia property market will be home to an additional 252,800 households by 2020. In order to satisfy this additional demographic demand, the stock of dwellings will need to grow by approximately 28,100 homes per year through to 2020.

According to the latest Housing Industry of Australia (HIA) report to 2020, in order to house the additional population as well as eliminate the already existing housing shortage, Western Australia will need to build approximately 31,700 homes per annum in the years to 2020. This is equivalent to 43 per cent more than the average build rate over the last five years.

The HIA report went further and stated that both the 28,100 and the 31,700 dwelling completion levels are unlikely to be achievable, further highlighting just how far the situation has got out of hand. Clearly, Western Australia needs to urgently address this issue and push for a higher annual build rate than is currently occurring.

Projections: 2012 and beyond

The Perth property market will be influenced by the fact that Western Australia is home to Australia's fastest growing population and now represents around 10 per cent of Australia's population. 2012 will start to see a general trend of investors moving back into the property market because of rising rental returns and the view that lower priced homes have reached the bottom of the market.

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