Perth. There’s much to love about our western most capital city; great beaches, diversifying economy and suburbs swept in a gentrification wave. Strong international migration is also a defining aspect of the city. Between the 2001 and 2011 censuses, the number of migrants living in Perth grew 51 per cent, higher than the growth seen in either Sydney (24 per cent) or Melbourne (31 per cent) during the same period. The mother land accounted for the highest rate of immigration; contributing to the English born accounting for around one in every eight of the population of Perth, or 190,000 residents! That’s equivalent to a St Helens right smack bang in the middle of Perth.
To the market! The figure below shows the median value of a Perth dwelling between March 2002 and December 2014. Since the GFC, the median price has increased by 31 per cent. The growth curve flattened significantly in mid 2014 as mining revenue declined. Still, the sector was the most significant contributor to Perth GDP growth in the 2013-14 financial year.
The Perth Economy has historically been a somewhat volatile one, typical of many mining dominant economies. Still, average GDP contribution per capita was higher in Perth than any other capital city over the 10 years to June 2014. The evolution toward economic diversity is likely to provide longer term economic stability:
- Contribution to GDP of Professional Services – 5.75 per cent to 8.5 per cent in the 10 years to June 2014
- Contribution to GDP Growth – Health Care 0.5 per cent of the 1.5 per cent growth in the 2014 financial year
- Health care industry has overtaken Manufacturing to be the second largest industry
The Growth curve of the Perth property market is advanced to that of Sydney, implying that a period of correction is on the horizon. As can be seen in the figure above, Perth market corrections are generally short lived, lasting less than 24 months. In contrast, the most recent Sydney property market correction took place over the four years to September 2008 (refer to ‘Where are the Markets – Sydney?’ for more detail). The ‘Post GFC Adjustment’ highlighted below is more a reactionary response to above equilibrium price growth associated with falling rates in the previous few years.
