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Why invest in WA

Respected property forecasters have predicted Perth property prices will outperform the rest of Australia in both  the short and long term. Here’s why:

Fastest rate of population growth
  • WA recorded the fastest rate of population growth in the nation of 2.1% inthe year to December 2010.
  • WA's rate of population growth has been leading the nation for the past five years.
  • The Australian Bureau of Statisitcs (ABS) predicts that Perth will have the highest percentage growth in population of all capital cities over the next 15 and 45 years.

Highest wages and lowest unemployment

  • As of May 2011, WA’s unemployment rate was at 4.3% - the lowest rate in the nation.
  • WA has regularly had a lower rate of unemployment than the national rate for most of the last 15 years.
  • According to the ABS, WA boasts the highest average earnings (or wages) of all states of $1,446 per week (quarter to February 2011). This represents a 7.1% increase over the previous year and 3.2% more than the nation‘s average over the same period. 

Strong housing prospects

  • In the latest report released by BIS Shrapnel, WA is predicted to have the strongest capital growth in the nation over the next three years. The report estimates growth in median prices of 19% by mid-2014,averaging 6.3% per year.
  • The Real Estate Institute of Western Australia observes that vacancy rates have begun tightening,currently sitting at around 3.2% for the three months to May 2011.
  • A report by the Housing Industry Association into WA housing needs to the year 2020, predicted there will be a shortfall of more than 70,000 homes in the coming decade.

Huge investment into the state

  • Access Economics revealed that as of June 2010, WA had $221.6 billion dollars of projects underway or planned, $75 billion dollars more than the next state in line, Queensland.
  • Most of the investment is in the resources industry. Some of the mammoth projects include the $43 billion Gorgon LNG project on Barrow island, Woodside’s $14.9 billion Pluto LNG project near Karratha, and $4.8 billion dollars worth of expansion plans for BHP Billiton’s iron ore operations in the north west.
  • The WA Department of State Development estimates that 45,000 jobs will be created during the construction phase for projects that are committed to or under consideration as of March 2011.

Stellar economic performance

  • ABS data suggests that over the past ten years, WA’s economy has achieved an average annual rate of growth in Gross State Product in excess of 4% per year, outperforming Australia’s growth of 3.5%.
  • Even with the GFC, the WA economy still managed to grow by 4.1% in 2008-2009 and then by 4.3% in 2009-2010, the only state to exceed the national Gross Domestic Product growth rate of 2.3%.
  • WA’s State Final Demand increased by 3.5% in 2009-2010, the strongest annual growth nationally.
  • Commonwealth Securities latest ‘State of the States’ report rates WA as the second strongest economy in the nation with economic output 27% higher than average over the past decade and annual economic growth the fastest in the nation at 7.2%.
 

Nation's leading exporter

  • WA is Australia’s largest exporter. The value of WA’s merchandise exports rose 33% to $102 billion in 2010, representing 44.2% of Australia’s merchandise exports (ABS).
  • China is WA’s largest export market, receiving $41 billion of WA’s exports, followed by Japan, Korea and India.
  • An initial draft of the Indian government’s five year plan for 2012-2017, suggests investment in infrastructure to double to US$1 trillion dollars, signalling potential for future export growth for WA.
  • The International Monetary Fund (IMF) has forecast growth of 9.6% in China and 8.4% in India in 2011, well above world economic growth forecasts of 4.2%, with average projected long term growth estimated at 9% and 8% respectively.
  • China became the world’s second largest economy in 2010 and is widely expected to become the world’s largest in the near future, with the IMF predicting the milestone to occur by the year 2016.
All these factors are unique to WA and point to a strong recovery in the local economy. After large gains in the Perth property market during 2004 - 2007 followed by flat periods during the subsequent global financial crisis, it appears as though the property market in Perth is ready for growth. All signs are now pointing to a signicant upswing in coming years, likely to be stronger than that of any other state or territory in Australia.
 
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