Is WA’s property market set for a turnaround?

The West Australian property market has suffered years of decline but some are optimistic that will change in 2018.

Lino Iacomella, WA Executive Director of the Property Council of Australia, stated that owners and investors have high expectations for 2018 with a number of factors backing increased confidence.

“WA property values are some of the most affordable in the country, interest rates remain at historic lows, an oversupply in housing was mostly soaked up, demand returned for new office space, and most importantly the development industry has a clear growth plan for Perth,” Ms Iacomella stated.

Adding to these factors, increased confidence in the mining sector is likely to be reflected in the state’s property market.

The mining downturn hit Western Australia hard, wiping out jobs as major companies cut costs and scaled back operations.

But investors are demonstrating increased enthusiasm for mining companies with a presence in the West, particularly those seeking to cash in on the lithium boom.

Lithium favourites such as Galaxy Resources Ltd (ASX: GXY), Kidman Resources Ltd (ASX: KDR) and Pilbara Minerals Ltd (ASX: PLS) all have operations in Western Australia.

But it’s not just those with a focus on lithium that are luring investors, with major miners Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) enjoying renewed optimism.

And it seems the Perth property market is showing signs of picking up.

In the week ended 19 December 2017 the Perth property market recorded a total of 562 sales, up from 494 for the same week last year, according to the Real Estate Institute of Western Australia.

Further, that increase in sales came as the number of listings dropped from 15,077 to 14,128 for the same period mentioned above.

As such, Ms Iacomella, encouraged by other factors, believes WA’s next growth cycle is beginning.

“In 2018 the property industry is expecting real progress on key policy reforms that will support WA’s growth, including modernising the state’s aging strata laws, adopting uniform local planning regulations and the introduction of a plan to guide WA’s infrastructure needs to enable the construction of new precincts and places that WA needs to support future growth,” Ms Iacomella said.

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