Negative mining headlines won’t dampen Perth’s rents
Negative mining headlines won’t dampen Perth’s rents
Posted on Friday, October 26 2012 at 4:30 PM
The Perth housing market is well positioned to weather any patchiness caused by an early peak of the mining boom, one local expert believes.
Recent speculation about ongoing investment in
resource projects and a reported ‘end’ to the boom likely sent a shockwave
through parts of Western Australia, Hegney Property Group’s Gavin Hegney says.
However the state’s mining sector relies on a small
population base, employing 11 per cent of the entire WA workforce, so with some
of the world’s largest commodity projects occurring in such a small economy this
means the impact is a “bucking horse, not a rocking horse”, he says.
Rental vacancy rates in Perth currently hover around
1.9 per cent and sale listings are about 4000 below the market equilibrium.
“That suggests a real ongoing demand for rental
properties rather than buying, (so) with a low vacancy rate and a below average
number of properties for sale, the Perth market is (well) positioned for a
mining downturn.”
If the industry expansion phase of the mining growth
cycle peaks earlier as some suggest, Perth’s housing market is “perfectly
placed”.
“If the mining investment was to run its suggested
original course and peak somewhere in 2014-15, then the Perth market is set for
a run in rents and prices, especially if interest rates were also to drop as
expected.”
If the goal is for an even and sustainable market,
Hegney believes the Perth property market is “well positioned”.
However, given a number of people move to WA to chase
the benefits of worker demand, the negativity and fear generated by media
reports might have an impact on migration levels, employment and sentiment, he
says.
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