Perth primed for new wave of property investment: Savills
Property investors are predicted to turn to Western Australia as demand for property in the east coast markets drives increasingly low yields, and correspondingly high prices, according to Savills.
Chris Ireland, State Director Retail Investments/Services, Savills said Perth is primed for a new wave of property investment as investors seek to take advantage of attractive yields in the wake of the end of the mining investment boom, with off-shore investors, particularly Chinese, set to take a more prominent role.
"As demand for property in the east coast markets drives increasingly low yields, and correspondingly high prices, investors will turn to WA, and those who do so first are those who stand to profit most,’’ he said.
"Of course retail, and especially neighbourhood centre retail, is regarded as a defensive investment, the sort of investment that continues to deliver in a downturn and that has been important in the upward sales trend we have seen over the last 12 months.
"But these investors also have an eye to the future in terms of considering location including local population growth and local and state government infrastructure initiatives, which will deliver long after the downturn ends,’’ Mr Ireland said.
Savills have recorded approximately $752.15 million worth of retail property transactions (>$1m) in the year to June in WA, up from $403.65 million in the previous year, and up on the five year average, of $690 million.
"In relative terms, China remains the sleeping giant but make no mistake its impact on the global economy will be felt for decades as the most significant economic event of a generation.
"We haven’t seen anything like the extent of its force in WA but Chinese overseas direct investment is expected to overtake inbound foreign direct investment in 2016.
"In other words, there will be more investment dollars moving out of China than moving in. This has the ability to significantly impact investment markets worldwide as the Chinese appetite for investment products increases and WA is going to see its fair share of that market."