Developing property in WA
Property Development in Western Australia
Most people in Australia have a financial interest in property. Development however is not always a word that springs to mind when people think of property investment strategy.
The majority of Australians are familiar with the phrase “safe as houses”, meaning many have a significant proportion of their wealth tied up in property. This is either in the family home, investment properties or through superannuation funds. In fact, the enormous total book value of Australian Property means Australians are regularly listed in the top 3 countries for wealth per capita.
Growth in property markets is cyclical, with most capital cities in Australia experiencing 7-10 years of growth followed by 5-10 years of market protraction. Being in the retraction phase of the cycle of your city puts the brakes on the capital growth strategy.
The alternative strategy – Property Development – is much more versatile. You can make money by developing property (creating equity in the near term ) at any point in the market cycle as you are not relying on capital growth to create equity. If you focus on getting the timing right however, you can compound your returns by executing property development and capital growth strategies concurrently if you in a growth cycle in the mark for your capital city.
JULY 2019 property clock, courtesy PPG
The trick is getting into a market at the bottom of the cycle, developing and selling as the market is growing ( rising market) or at the peak. Major capital centres on the East coast of Australia are entering the retraction phase of the cycle, with Melbourne and Sydney particularly due to face sharp downward market corrections over the coming years.
Perth on the other hand, is coming out the end of its retraction phase, and into the next growth phase of its market cycle.
There has never been a better time from a buy value perspective in Perth . All the correct indicators exist showing the start of the next phase of growth in the state:
New resources projects in the mid-west and north-west driving unmet labour demand and wages to levels higher than the last mining boom
Increased migration (overseas and interstate)
Rental vacancy rate falling sharply to just over 2%
Low interest rates
Low median house pricing against the national average
Exceptional affordability index ratings ( rent or house price to income ratio)
Highly competitive building and professional service market, providing value to the developer
It is a perfect time to get a property development started in Western Australia. The state is currently headed for a population increase to meet labour skills shortages, an undersupply of housing in key growth areas, and provides exceptional value for money for property acquisition. This is the opportune environment for a property developer to be operating in.
FLYNN Subdivision Experts are a family run property development consultancy based in Western Australia. We assist with:
Project acquisition ( if you dont already have one)
Project services and property development management
We provide all the services needed to accommodate your needs and help you enjoy a successful property development experience in Perth.
Partner with us, we invite you to develop with ease and expertise!