The number of available homes for sale in Perth, Western Australia has dried up, with less than 7,000 houses and units up for sale.
A year ago, the number was more than double that at 14,358, according to the Real Estate Institute of Western Australia (REIWA). REIWA president David Airey says it is the lowest number since the boom in 2006. Mr Airey suggested that around 10,000 was equilibrium, and as such the Perth housing market was at a critical point.
REIWA says around 900 properties are selling per week, so it doesn't take long to work out that the housing market is going to run out of stock without a greater rate of listing. Mr Airay said, "It's a classic supply and demand situation. The market will force prices up as buyers compete for limited stock."
Earlier this week, data from REIWA showed that Perth's median house price had reached a new record of $510,000 in February, above Melbourne's median price of $450,000 and not far behind Australia's most expensive capital, Sydney, on $550,000.
Speculation as to why Perth is proving to be a property hot-spot is rife. Cynics might suggest that the Perth housing market has been driven by the resources boom, with many workers moving from the eastern states to ease the fly in-fly out travel times. It could also be Australian oil workers, who are reputed to be the best paid in the world. According to The Herald Sun, oil and gas professionals in Australia earn US$163,000 a year, more than their counterparts in Norway, Canada and the US.
With several large LNG projects under development, nearing completion or recently operational, like Woodside Petroleum's (ASX: WPL) Pluto LNG plant, and several large conventional and unconventional oil and gas discoveries in Western Australia such as Buru Energy's (ASX: BRU) discoveries in the Canning super basin, the state looks set to see an oil and gas boom, taking off as the resources boom dies down.
The scarcity of homes in Perth has been good news for local developers Finbar Group (ASX: FRI) and Cedar Woods Properties (ASX: CWP), with Finbar reporting yesterday that it had sold all 324 lots in its Au and St Marks apartment projects in Perth, despite the Au project due to be completed in April 2014, and St Marks in September this year. Cedar Woods reported in February that it expects a strong second half of the 2013 financial year, driven by the limited housing supply, low interest rates and strong population growth.
Foolish takeaway
For Foolish investors looking to make a play on Western Australia's oil and gas boom, there are a host of companies to choose from, including LNG operators like Woodside, to explorers like Buru, or a picks-and-shovels play with property developers.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in Woodside, Cedar Woods and Finbar.