Phil's Property Corner
July Market Update
Thank you for your continued support as a referral partner with Candour Property Group. I have included my Monthly Market Update below.
Perth’s Median House Price experienced a drop of 2.5% to $515,000 in June, you can see REIWA’s June Market Update here. Naturally it would have been nice to see the incremental growth continue however it is not unusual to see some choppy results as the market bottoms out and starts to recover.
The rental market is continuing to improve gradually, the Median Rental has remained stable at $350 per week and the vacancy rate is now down to 5.0%, down significantly from the 7.3% we were recording in June 2017.
We are continuing to see very positive news in the mining sector - historically a great driver for jobs, wages growth and population growth. In recent months we’ve seen several big multi-billion dollar projects get the green light – the second stage of the Gorgon Gas Project and Tianqi’s Lithium mine in Bunbury is doubling in size along with the processing plant in Kwinana. In the last month we’ve seen FMG, BGC and Rio Tinto all confirm they’re proceeding with new large-scale iron ore mines. This will create a huge level of demand for jobs during the construction phases and the job adverts are already starting to reflect this. Here is an article by ABC going into the impact on jobs in some detail.
Whilst many still consider Perth to be predominantly a mining-based economy the years since the last mining boom faded have allowed our city to diversify our economy and employment significantly. We have put on over 30,000 jobs over the last year alone with only a small fraction of those being in the mining industry, instead the fastest growing sectors have been manufacturing and healthcare. Over the last year this has seen our participation rate (those with a job or looking as a percentage of population) increase by a full percentage point with WA now boasting the highest participation rate of any state in Australia. Mining is now set to add to an already solid jobs sector, rather than being the focal point it has been in the past it is now able to further stimulate an already healthy economy. This article by The West Australian goes into more detail about the participation rate and one of the recent iron ore mines approved to go ahead.
It is news such as this that has many economic forecast companies to predict that Perth’s property market will slowly and steadily increase over the next few years. BIS Oxford Economics have predicted that Perth’s prices will increase by 10% from now to 2021 – you can find an ABC article containing their predictions for all states here.
At a time of the year where we’re all very conscious of the tax we’ve given to the ATO over the previous 12 months it’s an excellent time to review what things you could do differently for the year ahead, to work smarter rather than harder. The commonly held wisdom among investors of all types is to buy when the market is low and sell when the market is high. The beauty of property investment is that the investment can in most cases pay for itself and help you reduce your home loan faster while you wait for that growth.
One of my favourite sayings is ‘Knowledge is Power’ by Francis Bacon. My passion is ensuring every one of my clients is given access to the information required to make quality decisions about their financial wellbeing. I would love to help you know how to use this market to your advantage.
If you’d like to know more the next step is to chat with Phil Bertram. There is no obligation to proceed any further than you’re comfortable with and he doesn’t charge for his time.
To arrange for him to call you please email him with your name and contact number on firstname.lastname@example.org and he’ll be in touch. Or contact him directly on 0477 228 803.
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You can find all previous Market Updates here.