By Herron Todd White
2019 has seen a regional residential property market in the South West of WA that has shown noticeable resilience generally against the backdrop of the banking Royal Commission and state debt remaining high (albeit beginning to reduce) and unemployment rates not improving much over the past 12 months. Bank interest rates were predicted to reduce during 2019 which has transpired, but household income has appeared to decline, as utility charges continue to rise year on year. This has resulted in a weak residential property market that was anticipated but realistically priced and well-presented dwellings are selling, albeit slowly, in a market where the buyer remains in a better position.
At the start of the year there was talk of improvement in the trading of the Western Australian minerals resources sector and this was notable in the growth of lithium production, particularly at the world’s largest lithium mine at Greenbushes (80 kilometres south-west of Bunbury). The exportation of iron ore from the Pilbara has also increased, albeit with slightly lower prices. This improvement in the resources market is having a modest positive effect on the residential property in the South West of WA due to resurgence in the FIFO workforce from the area. One noticeable effect is the bottoming of the rental market which was anticipated 12 months ago.
The South West of WA remains a leading growth area for both residential and commercial development and the majority of the demographic of the new residents is made up of young families who are supporting the local economy and schools, improving community resilience. There was also an anticipated growth of retirees relocating to the region which has seen new development of over 55s retirement accommodation in Kealy and Dunsborough.
A significant win for the region was the announcement in November that Jetstar will be commencing direct flights from Busselton-Margaret River Regional Airport to Melbourne from March 2020. It is anticipated that this will provide stimulus for market improvement in the local economy.
As the current year comes to a close, analysis has revealed that residential property values have dropped six percent in the Busselton region and other areas such as Collie and Dalyellup have performed even more poorly, but the upside of this trading climate is that investors are cautiously returning to the market as returns on investments begin to look more attractive.
In conclusion, the regional residential property market was at best benign during 2019 against the challenging economic climate.
Our score for South West WA’s 2019 prediction is six out of ten.
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