Mining sector decline detering Perth property market investment: WBP

Mining sector decline detering Perth property market investment: WBP
Mining sector decline detering Perth property market investment: WBP

Due to the decline of the mining sector in Perth, prospective buyers are unwilling to invest in property, according to WBP Property Group's latest report.

The downturn in the Western Australian mining sector has resulted in a "palpable" reduction of consumer confidence as individuals realise the impact of the unfolding crisis.

"Prospective purchasers are unwilling, and in some cases unable, to raise funds to purchase properties, the cautionary approach leading to uncertainty regarding the future direction of residential and commercial real estate markets in Perth and surrounds," the report said.

"This has led to a glut of sale listing in greater Perth and the Peel region, with data estimating around 14,000 home currently for sale, and a further 10,000 properties available for rent.

"This is clear evidence of softened market conditions, which dictates properties of all persuasions must be priced realistically to realise clearance," the report stated.

It suggested there is a high likelihood that property values could decrease further in the short- to medium-term.

“But, it’s not all bad news," the report stated.

"There remains sound demand and buyer activity in well-located inner city areas, particularly those in school catchment areas and near the river, and well-established older suburbs complimented by infrastructure, shopping and retail precincts."

In these areas property values range from $800,000 to $1,500,000.

It noted while value levels remain relatively flat, supply and demand are close to equilibrium.

Meanwhile, the apartment market in Perth is oversupplied, which will be further compounded as developments currently under construction come online over the next two years, many during the same period.

"Unsurprisingly, many properties purchased off the plan during the past 18 to 24 months are struggling to meet current market values," the report stated.

Tags: 
Perth Wbp Property Group

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