Perth is set to be the next Melbourne, a new report from Infrastructure Australia indicates. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019. With prices at an affordable rate, property situated in choice locations are ripe for the picking and investors stand a chance to reap returns from the growth of the property market in the future.
Currently Perth is Australia’s fourth largest city by population. By 2046 it is forecast to leapfrog Brisbane into third place, with 4.3 million people — the current population of Melbourne. And if the Government’s recent proposal to restrict immigration to Sydney and Melbourne goes through, the city’s eventual population may exceed even that figure.
Australians traditionally are resistant to the idea of living in apartments, and this is more so for those living in Perth. Just 6.6% of the city’s residents live in apartments, half the national average of 13.1%. This will change as numbers increase — as a large-scale city grows, it expands not just outwards but upwards as well.
The Perth suburban sprawl stretches along the Western coastline for about 150km, making it almost nine times as large as Singapore, but with just over a third of its population. As the population grows to a similar scale as Melbourne, apartment living will become more widespread.
The 2016 Australian Census showed that there is one occupied apartment for every five (1:5) occupied separate houses in Australia; compared with one to every seven (1:7) 25 years ago. Apartments are also getting taller. Twenty years ago, about 20% of apartments were in blocks at least four storeys high, with the proportion now closer to 40%.
Over the past decade, the number of apartments in the Perth council area alone has increased by about 150%. Perth has seen changes in planning that recognises this, and state and local governments are encouraging strategic placing of mixed-developments where they benefit the most, close to existing good transport, infrastructure and in high-amenity locations.
One example of these developments is NV, a new off-plan apartment within Perth’s central business district (CBD), benefitting from the completion of the Perth City Link.
Perth City Link is a major urban renewal and redevelopment project to the tune of over A$5 billion, playing a central role in regenerating Perth’s entertainment, cultural, shopping and infrastructure links. Rail and bus links have been completed, connecting the city centre with the Northbridge entertainment precinct. Currently, further development is ongoing on a mix of retail, tourist, office and residential accommodation.
Corelogic looked at changes in the property market across Australia over the last 25 years, and found that prices in Perth grew at an annual 6.7% for houses and 6% for apartment units since 1993 — making it the third best property market after Sydney and Melbourne.
Following the nation’s property downturn, prices have slipped by more than 10% across the city since mid-2014, although some areas have managed to be relatively unscathed. The outlook for the next two years is that improvement in the economy and population growth will stabilise the Perth real estate market. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019.
RED ALERT: Perth will be imposing additional stamp duty for foreign investors in January, which is an extra 7% on the property price. Investors looking to buy property can avoid the hike by signing contracts before Jan 1st, 2019.
Interested in to get into the Perth property market before the 7% tax kicks in? One of the latest developments in the city’s prime CBD, NV Apartments, has a superb location with a whole host of luxurious amenities, from just A$313,000. Act quickly and give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at firstname.lastname@example.org.
By Ian Choong Edited by Vivienne Pal
- Featured image: State Library & TripAdvisor