WA economy solid but property patchy

Export opportunities will benefit the WA economy but property values might not rise during the short term.

WESTERN Australia has a solid economy, which will continue to benefit from export opportunities but the property market might take longer to recover, according to the experts.

The Housing Industry Association’s Housing Industry scorecard said the investment phase in WA’s resources sector had ended and the economy was re-balancing to a new equilibrium.

“Underlying this headline story is a solid economy which will continue to benefit from the export opportunities presented by the lower Australian dollar,’’ the scorecard said.

“Rising commodity prices, such as iron ore, will also earn valuable income for the state.

“Garnish this with record demand for agricultural product, due to unprecedented demand from Asia for protein and feed grain, and the WA economy looks set to improve and residential building will benefit.

“Building activity in the March quarter  shows an increase in activity (4.1 per cent), one of only two states to record an increase in this quarter.

WA ranked seventh on the scorecard – up one from the last scorecard where it rated last on the scorecard.

“At the very least, this looks like the point of inflexion on the curve for the WA economy and we should not expect WA to spend long at this end of the HIA Scorecard.’’

But the Property Council WA said a confidence survey showed recovery in the WA property sector could take a little longer to materialise after the recent surge in confidence slipped a little.

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.

Property Council WA executive director Lino Iacomella said there was no doubt that a recovery in the WA property industry was underway but it was patchy and there would be ups and downs in sales and price expectations 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 in WA 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 very 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.’’