WA property recovery on track with bumps on the way

 

The WA property sector is on track for a recovery but it looks like it will take a little longer to fully materialise according to the latest survey of business confidence in the industry. 

Business confidence in the WA property sector dropped 4 index points to 114 in the September quarter 2017, following a 20-point climb to its highest level since 2013 in the previous quarter, according to data from the ANZ/Property Council Survey.

There is no doubt that a recovery in the WA property industry is underway but it is patchy and there will be ups and downs in sales and house price reports for a little longer.

The main take-outs from the latest survey are that the WA property industry does not expect the State economy to experience strong growth in the short-term and that we are less likely to see property values rise significantly over the next few months.

The sectors under most pressure continue to be the housing, commercial office, and industrial sectors.

The sectors with growth expectations are retail and retirement living.

These results coincide with the release of the 2016 census figures, which show the importance of population growth for the property industry in WA over the last five years.

The latest population estimates for WA show a big slow-down in growth in 2017, which is disturbing. This is contributing to the patchy and drawn out recovery of the property industry in WA.

Keeping WA growing must be the priority for government policy formulation. Streamlining the infrastructure system in WA and progressing reforms to the state’s strata title laws are two examples of growth initiatives that need to be prioritised.