There has never been a better time to make your move to Perth
In recent years there has been significant investment in both the development of new offices, the refurbishment of existing property stock and the emergence of vibrant co-working facilities to suit all business needs.
With the population expected to reach 3.5 million by 2050, Perth will become Australia’s third largest capital.
This growth is fuelling significant investment in property by both public and private investors. More than $450 million is being invested in the retail sector alone at Raine Square, Forrest Chase, Carillon City and Plaza and Piccadilly Arcades.
There has also been a 22% increase in the number of residents living in the Central Business District (CBD) since 2011, with predictions it will reach 41,000 by 2036. This growth in resident numbers is forecast to continue, driven by new purpose-built student accommodation and 3,800 new apartments expected to be completed by 2020, offering a range of CBD living options to both investors and residents.
When Perth reaches a population of 3.5 million people, it will continue to be an innovative 21st century city delivering distinctive Western Australian lifestyle choices and global opportunities.
Over the past 10 years Perth has consistently featured in the top global city rankings for liveability and quality of life with consideration for stability, access to education and health care, and quality of infrastructure and environment.
Significant government and private sector investment
The WA economy is expected to grow by 3.3% in 2018/19 and with over $90b worth of resources and mining projects pre-approved, household consumption is increasing and consumer confidence is growing. The WA Government has committed over $1.1b towards expansion and improvement of public transport through Metronet and there is over $14b of projects either recently completed, under construction or awaiting approval.
Perth is Australia’s leading capital city for professional job advertisements at 18.3% vs national average of 11%. Confidence in Perth’s economy is evident with $450m invested in current CBD retail projects and over $4.5b investment planned for Greater Perth retail centres to 2020.
Rise of prime property in Perth
Prime property prices in the top 5% of the market have grown by 2.7% in 2018. The value proposition for prime property in Perth is significantly cheaper than other capital cities in Australia, with US$1m able to buy 129sqm of prime property in Perth compared to 50sqm in Sydney and 94sqm in Melbourne.
Reasons to Think Perth
Improved office vacancy and adaptability
Perth’s CBD office vacancy rate has fallen to 18.5% in January 2019 (the lowest since 2015) with trends of building fit-out, lower rates of sub-leasing and attraction of longer-term tenants all pointing to a revitalised Perth office market.
The growing presence of vibrant co-working and serviced office providers is also adding an innovative resiliency to the Perth commercial property sector. Large corporates are becoming the dominant tenants in flexible and co-working office spaces as the appetite for flexibility grows. A recent article predicts that by 2030, up to 30% of all office real estate will be classed as “flexible”.
CBRE reports the flexible workspace industry has grown by almost 300% across Australia since 2013 occupying some 193,000sqm of space across Australia’s six major cities. The footprint of co-working and flexible workspace in Perth is expected to increase from approximately 8,000sqm to almost 20,000sqm in 2019.
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Reasons to Think Perth
Lower residential vacancy
The Perth market is now absorbing recently added rental stock with residential vacancy in wider Perth falling to 2.8% in December 2018 from 17% in June 2017. As the long-term trend of population and economic growth in WA continues, additional apartments will be required to meet the growing demand for city living.
Relative value compared to other capital cities
The median value for an apartment in Perth YTD 2018 was $379k, compared to $737k in Sydney and $496k in Melbourne. The average house price of $556k in Perth is also significantly lower than Sydney ($1.14m) and Melbourne ($882k).
Apartment capital value growth and rental yields rebounding
Of the four major Australian capital cities, Perth recorded the strongest capital growth for apartments (1.7%) in the year ending June 2018. This is Perth’s best annual rate of growth since December 2014. Residential rental yields for the year ending June 2018 have grown 20bps over the last 5 years. Perth has achieved an average apartment rental yield of 4.77%, outstripping the national average of 4.55%.
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Reasons to Think Perth
Retail markets in the City of Perth are undergoing major change
With a wave of major developments in the pipeline, projects worth approximately $450 million have been completed or are currently under construction across Raine Square, Plaza Arcade, Forrest Chase and Yagan Square. With more than $200 million of works at Carillon City and Piccadilly Arcade either approved or awaiting approval, this figure is set to rise. These developments are focused on food and beverage tenants, flagship stores and entertainment options such as cinemas.
The City of Perth is the perfect place to make your mark in the retail sector.
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