Market Outlook Perth Western Australia
OUTLOOK
PERTH
WESTERN AUSTRALIA
01
Perth Overview
02
Education
Demographics
03
Investment
Employment
04
Perth Infrastructure
05
Residential
Property Market
Prepared exclusively for
Pindan
August 2017 PERTH
OVERVIEW
ECONOMIC GROWTH IMPORTANT TIMEZONE
Perth shares a time zone with approximately 60% of the world’s population. The recent introduction of Perth-London direct flights reinforces the Perth’s role as Australia’s
Western Gateway and provides a vital entry point for
European travellers.
Over the last decade, Western Australia was the strongest performing economy in the nation.
AVERAGE ANNUAL GROWTH 10 YEAR TO 2015/16:
5%
1.5% 2.2% 2.2% 2.8%
IMF Advanced
Economies
NSW VIC Australia WA
WA’s GSP per capita was $92,056 in June 2016.
33% HIGHER
THAN THE NATIONAL EQUIVALENT
OF $69,134 IN THE SAME PERIOD
Source: ABS, IMF (Constant Prices), OECD.
New Delhi
KEY TRADING PARTNERS
China is predicted to be the world’s largest economy come 2026 (The Economist). Further sources of export demand include growth centres of Asia.
Kuala Lumpur
Singap
Proportion of WA exports Forecast GDP
(as of May 2017) growth to 2022 Jakarta
China 62% 5.9%
Japan 15% 0.6%
South Korea 7% 3.0%
Asean 5 5.3% 9%
Source: ABS, IMF: World Economic Outlook (WEO) Note: Association for
Southeast Nations (ASEAN 5) includes Indonesia, Malaysia, the Phillipines,
Singapore and Thailand.
3.5 hrs
Source: Department of State Development
SINCE MAY 2016, ONE OF THE 1 hour timezone
EXPORTS TO CHINA WORLD’S TOP
5 hour business timezone
HAS INCREASED TEN MOST
BY 28%. LIVEABLE CITIES.
2Market Outlook Perth, Western Australia Australia’s western gateway and most accessible capital city to the world’s strongest economic growth regions.
LIVEABILITY
The Economist Intelligence Unit scores cities on over 30 factors within five broad categories: stability, healthcare, culture, education and infrastructure. Perth has ranked in the top ten most liveable cities for over ten years. In 2016,
Perth was ranked 7th, up from 8th in 2015.
PERTH’S LIVEABILITY SCORES
City Rank Overall
(100=ideal, 0=intolerable)
100
90
80
70
Beijing
60
50
Tokyo
40
30
Shanghai
20
10 hrs
9 hrs
10
0
Overall
Hong Kong
Source: Economist Intelligence Unit
EMERGING ARTS CAPITAL
The 2017 Perth International Arts Festival ran for three weeks and was hosted at the newly developed
Elizabeth Quay.
8 hrs
The Western
Perth hosts
Australian Academy
Australia’s oldest of Performing Arts (WAAPA) at Edith Cowen University
(ECU) has been ranked as one of the best 25 acting schools in the world
International Arts
Festival (64 years).
5 hrs
Over 750,000 people viewed events at one of 150 venues and had total
flow on economic impact
$84.3 million.
With 3,400 artists and 700 acts, the 2017 Perth Fringe World
Festival was the third
Perth largest worldwide
.
Prepared by Urbis; Source: WAAPA, ECU’s 2016 Annual Report, PIA, Fringe World
PERTH’S 13% POPULATION
GROWTH IN THE FIVE YEARS TO
JUNE 2016 EXCEEDS SYDNEY,
MELBOURNE AND BRISBANE
Prepared exclusively for Pindan 3
EDUCATION
DEMOGRAPHICS
01* Perth Modern School
02* Presbyterian Ladies' College
03* Penrhos College
04* Christ Church Grammer School
05* Santa Maria College
06* St Hildas Anglican School for Girls
07* Perth College
08* St Mary's Anglican Girls' School
09* Methodist Ladies' College
10* Shenton College
PRIMARY SECONDARY EDUCATION
Perth’s primary and secondary schools, both public and private, provide a high-quality education to students.
Many private schools offer on-campus boarding facilities for secondary school (or older) students. In its latest budget, the state government proposed $4.84b to education. In 2016 student enrolment growth increased by 1.3% from the previous year and a forecast of 9.0%
(or 26,551 students) growth between 2014-2019.
Prepared by Urbis; Source: Western Australian School Curriculum and Standards Authority.
* Based on number of year 12 subject enrolments where a WACE course score of at least
75+ achieved (excludes vocational subjects),2016.
On-Site Boarding Facilities
TERTIARY EDUCATION
PERTH'S UNIVERSITIES
• The University of Western Australia (UWA) ranks among the top 1% of universities in the world. It is the only WA member of Australia’s “Group of Eight”: the country’s leading research institutions.
The Edith University
University Cowan Of Notre Curtin Murdoch
• An excellent location for education. According to QS
Best Student Cities 2016 list, Perth ranks 35 in the world.
• The Western Australian Academy of Performing Arts
(WAAPA) and Edith Cowen University (ECU) has been ranked as one of the best 25 acting schools in the world (The Hollywood Reporter 2012).
University University
University of WA Dame
WESTERN AUSTRALIA'S OVERSEAS STUDENT NUMBERS
40,000
30,000
20,000
10,000
0
• There are also 11 Technical and Further Education
(TAFE) Colleges in Western Australia.
Prepared by Urbis; Source: Department of Education and Training
DEMOGRAPHICS
ESTIMATED RESIDENT POPULATION GROWTH FIVE
YEARS TO JUNE 2016
• Perth was the fastest growing capital city over the five years to June 2016.
• The WA Government is planning for Greater Perth to grow from approximately 2 million people to 3.5 million by 2050.
9% 11%
13%
Perth
9%
Sydney Melbourne
Brisbane
• Perth’s population is projected to outnumber that of Brisbane from 2028, making Perth Australia’s third most populous city according to ABS Population
Projections.
• As at June 2016, Western Australia accounts for
11% of Australia’s total population and 79% of WA’s population resided in Greater Perth.
• As at 2016, 43% of Greater Perth’s population was born overseas. The city’s social fabric reflected over
200 nationalities speaking 270 languages.
Prepared by Urbis; Source: ABS
STRONG FORECAST POPULATION GROWTH
FOR GREATER PERTH
3,500
3,000
2,500
2,000
1,500
1,000
500
0
• According to SAFi forecasts by i.d, Greater Perth’s population is expected to increase by 47,600 people p.a. between 2016 and 2021. This reflects annual growth of 2.2%.
2001 2006 2011 2016F 2021F 2026F 2031F 2036F
Prepared by Urbis; Source: SAFi.id
4Market Outlook Perth, Western Australia INVESTMENT
EMPLOYMENT
VALUE OF COMMITTED PROJECTS BY JURISDICTION
MINING, OIL AND GAS
According to the Office of the Chief Economist
Queensland
(December 2016), committed mining, oil and gas and infrastructure projects in WA have a combined project value of $136.7 billion. This represents 70% of the total value of all projects across Australia ($194.8 billion).
Western
5.9%
New South Wales
Australia
70.1%
0.7%
V1i.c0to%ria
Perth is one of the 20 international energy capitals. It is home to 35% of companies listed on the Australian
Securities Exchange, which collectively account for the largest proportion of Australian mining companies in
Africa, South America and Central Asia.
South Australia
0.3%
Northern
T2e1rr.it9or%y
Prepared by Urbis; Source: Office of Chief Economist December 2016
EMPLOYMENT AND TOURISM
As one of the largest and most diverse states in the world, WA offers a wide range of unique holiday experiences. Perth acts as the gateway for WA tourism and the importance of the tourism sector is forecast to continue to grow. Some key facts about tourism are:
WA’s workforce has grown by 4.3% over the last five years to 1.37 million people (ABS May 2017). The highest number of employees worked in health care and social assistance, followed by construction. The mining sector is a major part of the WA economy, however ranks seventh in terms of number of people employed.
109,000 PEOPLE 9% INCREASE OF Health
Care
12.2% of in tourism related industries
EMPLOYED VISITORS TO WA
166,800
147,400 workforce year ending March 2017
10.8% of workforce
Construction
Retail
Trade
9.3%
126,800
105,000 of workforce
$10.1B $2.3B
Education
Training
7.7%
SPENT SPENT of workforce of workforce by tourists in by international visitors in
Western Australia the year ending March 17
Accommodation
Food Services
7.4%
102,100
100,900
Prepared by Urbis; Source: Tourism Western Australia
Professional,
Scientic
7.4%
Although not a large direct employer, agriculture plays an important and growing part of the WA economy. In 2015-16, the state’s Gross Value of Agricultural Production (GVAP) was $8.2 billion, 15% of Australia’s total GVAP. WA prides itself on the outstanding quality of its produce. of workforce
Technical trade
6.9%
Mining
94,000 of workforce
Prepared by Urbis; Source: ABS
30% 11% 10% 9% 8%
($933M) ($2.5B) ($661M) ($825M) ($730M) wheat livestock barley canola wool
Prepared exclusively for Pindan 5
PERTH
INFRASTRUCTURE
01 Perth City Link
Linking the Perth CBD and Northbridge, City
Link is one Australia’s transit orientated developments which will comprise over 1,900 apartments and 244,000 sq.m of office and retail space for 13,500 new workers. The government is investing
$1.39 billion in the precinct which includes the value of the Perth Arena.
08
02 Perth Arena
Perth Arena has a capacity of 15,500
03 visitors and was ranked seventh in the world in 2014 for revenue among venues in its size category (Pollstar). Perth Arena also hosts sporting events like the annual Hopman Cup tennis tournament and National Basketball League (NBL) matches. It opened in 2012 and had a project value of $548 million.
03 Elizabeth Quay
The public realm of Elizabeth Quay opened
07 in January 2016 to serve as an events and recreation space. It links the Swan River and Perth CBD. The government’s $440 million project will deliver 800 apartments, 400 hotel rooms and 225,000 sq.m of commercial space (accommodating
10,000) workers.
04 Perth Stadium
The Perth Stadium is located on the Swan
River and will provide
60,000 seats for major sporting and entertainment venues which will make it the third largest stadium in Australia.
It is capable of attracting national and international events to Perth. The $1.2 billion project is expected to open in 2018.
6Market Outlook Perth, Western Australia 05 New WA Museum
Located in the Perth Cultural Centre, the $428 million
finished product (delivery in 2020) will allow curators to present innovative displays. The project comprises around 23,000 sqm of refurbished heritage and new buildings.
06 Forrestfield-Airport Link
This $2 billion train line will link Forrestfield, Perth
Airport and the Perth CBD (8.5km in length) and create three new stations at Belmont, Airport Central and Forrestfield. The project was launched in 2014 and in 2016 construction commenced, with completion scheduled for 2020.
02
01
05
07 Riverside
Covering 40 hectares of land in East Perth, the Metropolitan Redevelopment Authority’s vision for
Riverside is a cosmopolitan waterfront community and tourist destination. Upon completion, Riverside will be home to 7,000 new residents and 6,000 new workers. The Waterbank development lies at the heart of the precinct.
06
08 Perth Childrens Hospital
The hospital site is located in Nedlands and will replace
Princess Margaret Hospital as the State’s dedicated children’s hospital. The project is $1.2 billion and is expecting completion in 2018. It will aim to provide specialty medical treatment, inpatient and outpatient care and day stay care services.
09 Crown Casino Perth
Crown Perth, Western Australia’s only casino complex, has been extended. The precinct includes new cafés and restaurants as well as a six-star Crown Towers hotel which comprises 500 rooms. It has made a significant contribution to the state governments vision in the Burswood Peninsula.
04
09
10 Other New Hotels
Perth’s hotel market is likely to grow in the near future as new hotels enter the market. New hotel development includes the 204 room Ritz Carlton at Elizabeth Quay and the 362 room Westin Hotel.
Prepared exclusively for Pindan 7
RESIDENTIAL
PROPERTY MARKET
House and unit price growth and sales activity was strongest leading up to the Global Financial Crisis
(GFC). House prices increased from $160,000 in 2000 to $462,500 in 2007 (27% p.a) and apartment prices increased from $108,000 in 2000 to $385,000 in 2007
(37% p.a).
RESIDENTIAL SALES CYCLE
METROPOLITAN PERTH
(2000 ꢀ 2016)
Apartment Apartment House
Sales Median Price Median Price
While Perth apartment sales have moderated since the 2013 post resources boom period, the median unit price has held up relatively well at $405,000 over 2016. Perth is emerging from a cyclical trough and the underlying fundamentals of a resilient economy, pipeline of infrastructure investment and the next wave of resource sector investment is expected to bolster the residential market over the medium to longer term.
7000
6000
5000
4000
3000
2000
1000
0
600000
500000
400000
300000
200000
100000
0
222222222
Numerous factors will drive a strong increase in demand for apartments in Perth. Key drivers are summarised as follows:
Prepared by Urbis; Source: APM PriceFinder
Affordability: Perth has seen rapid growth in house prices over the last decade. Apartments offer a relatively affordable market entry point alternative to houses. First home buyers can enter a suburb which may otherwise be beyond their budget and downsizers can remain close to their existing residence and trade down.
MEDIAN PRICE GROWTH
HOUSES ACROSS METROPOLITAN PERTH
(March 2017)
Shifting Demographics: Perth’s population has been growing at the fastest rate of any Australian capital city. An aging population, lower fertility rates, declining household sizes and prevalence of young overseas migrants are leading to an increase in demand for smaller dwellings.
1.9%
Change in median price
(3 years)
-0.9% 1.8%
Change in median price
(5 years)
Annual change in median price
(10 years)
Low Land Availability: Few opportunities for new, single lot land subdivision, particularly in inner city areas are increasing market acceptance of higher density residential product. Apartment living offers proximity to a wide range of amenities.
Prepared by Urbis; Source: APM PriceFinder
Government Policy: The Metropolitan Redevelopment
Authority, City of Perth and WA Planning Commission all have central policy objectives striving for a greater variety in housing options and higher density development.
1.7%
ANNUAL CHANGE IN
MEDIAN UNIT PRICE
(10 years to March 2017)
Prepared by Urbis; Source: APM PriceFinder
Prepared exclusively for Pindan
This study has been prepared for the sole use of Pindan and is not to be relied upon by any third party for the purposes of financial investment without specific approval. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effect to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by incorrect assumptions or by know or unknown risks and uncertainties. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquires should be addressed to the publishers.