Perth’s private spending pipeline brings new opportunities for residential investors
A surge in private spending could bring a new bout of opportunities for residential property investors, according to a new report from Momentum Wealth’s Research Division.
The Perth Private Spending Report outlines a significant influx of private infrastructure spending across Western Australia, with a large number of projects both committed to and underway within the State’s hotel, apartment, retail and resources sectors.
Whilst Perth has already seen the completion of a number of high profile developments since our last report in 2017, including the highly-anticipated redevelopment of Westfield Carousel, the latest update shows that a large proportion of works still lie ahead for the State.
The renewed pipeline of projects includes over $3 billion of upgrades to metropolitan shopping centres, 11 major hotels, a host of major apartment developments and $108 billion worth of resources projects.
Whilst the construction and operation of these projects will generate thousands of new employment opportunities and help stimulate Perth’s local economy, the report explains that these developments could play a key role in enhancing local amenity, which will in turn help drive demand and property prices in surrounding regions.
Investment pipeline a huge boost to WA confidence
The large pipeline of impending works serves as a strong vote of confidence in Perth’s long-term outlook on the part of national and international developers, hoteliers, shopping centre operators and resources companies.
This has been supported in turn by a number of changes to WA government policy, including the lifting of caps on the maximum size of shopping centres and a push towards multi-use developments and higher density living.
These policies have helped loosen WA’s once restrictive approach to multi-use developments to facilitate the expansion and diversification of the State’s activity centres.
Whilst increased spending across the retail and hotel sectors has become an important part of the State-wide push towards diversifying WA’s economy, the report highlights that the influx of new resources projects is a clear indication of continued interest in the State’s mining industry, in turn cementing its pivotal role as a long-term pillar of WA’s economy.
Resources still crucial to WA economy
WA’s resources industry has witnessed a renewed surge of activity following a stream of new investments from major industry players such as Woodside, Fortescue Metals and BHP Billiton, with the State’s burgeoning lithium industry attracting the attention of international firms such as US lithium giant, Albemarle.
The report explains that these projects could provide a fundamental catalyst for wage growth and rising employment levels, both of which help strengthen the State’s economic and housing markets.
Whilst these projects collectively create tens of thousands of new employment opportunities, they also hold fundamental importance for the State due to the flow-on effect this has on the wider economy, with wage growth in turn leading to increased levels of consumer spending.
In addition, the influx of FIFO workers that accompanies these projects could prove an important trigger for the growth of Perth’s property market, with the projected rise in population in turn impacting demand for housing and rentals.
Property investors need to focus on projects that generate demand
While the rise in private investment will inevitably hold positive implications for Perth’s economy, property investors looking to reap the rewards of upcoming projects need to remain vigilant in their investment decisions.
Whilst projects such as hotel and apartment developments help stimulate the local economy through the creation of employment opportunities, investors who want to benefit from the increase in private spending will need to focus their property search on projects that deliver more tangible benefits to nearby communities by way of new amenity.
With an increasing number of tenants and owners prioritising factors such as proximity to local activity centres in their property selection criteria, projects that deliver these benefits are likely to have a greater influence on demand for property in surrounding areas.
Want to learn more about the latest projects impacting Perth’s residential property market? Download your free copy of the Perth Private Spending Report.