In November 2008, things looked dire for the real estate market in Western Australia. Several years of sustained growth had come to an abrupt halt in late 2007 and the Global Financial Crisis only exacerbated the loss of confidence in the market.
Twelve months on, things have changed. Not only have buyers returned to the marketplace in Perth’s western suburbs, they’ve done so with gusto. In fact, the past two months have been some of the best in terms of sales in this area for three years.
So why has the market bounced back? And what are the prospects of this renewed market activity continuing?
The answer to the first question lies in the renewed confidence on the part of the business community; many who live in the western suburbs. Last year, this section of the market were one of the first to “baton down the hatches” in the face of the global economic turmoil. As a result, there were fewer buyers and prices fell; generally hitting the bottom of the market in March of this year.
Since then, however, things have slowly improved. The Federal Government’s stimulus initiative for first home buyers, which arguably sustained the real estate market as a whole in the first part of the year, eventually had a flow-on effect to the more expensive homes. So too did the announcement by the State Government of resource projects worth $100 billion dollars to WA over the next 20 years. Though the market in the western suburbs is yet to reach the heights of 2006 and 2007 when “sellers wore the pants”, it has recovered to a significant degree, particularly at the lower end of this market.
As for the future? Well, the decision by the Federal Government to increase interest rates for the third time in as many months is a sure sign that the real estate market, across the nation, is recovering. In other parts of Australia, such increases might dampen optimism. In the western suburbs however, particular given the positive overtones arising from Gorgon and other resource projects, we’re anticipating that we will experience moderate growth in 2010.