When our international borders finally re-open there will be extra and considerable pressure on house prices.
The pandemic has put the spotlight on Australia, and in particular Western Australia. I’m on regular Zoom calls with clients in South East Asia and they are all very aware and interested in the Perth pandemic success story.
There’s no doubt Covid-19 has changed the dynamics of our global interest and international investors are waiting to pounce when borders open and policy allows. This means local investors should consider taking a position in the market now to ensure they are ahead of the game.
The Centre for Population predicts that overseas migration will return to pre-pandemic levels by 2025. In the last full financial year before Covid-19, Australia’s net overseas migration was 239,700. In 2020-21 it fell to 154,100 and now it’s around 71,600. It’s looking like it will improve slightly to -21,000 before the end of 2021-22 but net migration isn’t expected to return to positive growth of around 96,000 until 2022-23 and just over 200,000 in 2023-24.
International investors have always understood the value of the WA lifestyle, education and retirement to real estate investment. But now the interest has intensified. They no longer want to gamble on currency fluctuations but they do want to hedge with investments at home and in the “safe haven” of WA. I expect we’ll see this happen over the course of the next 10 years.
This will mean an obvious increase in prices because of an increased demand. They will pursue the traditionally sought-after areas in the western and inner northern suburbs, but there will also be a pursuit of the middle class belts so you can expect to see international buyers venture further out than previously.
We’re in a very different bubble this time so I can’t see prices dropping any time soon.
At Johnson Property Group we’ve been active in the South East Asian market and client base for more than two decades so we’re very aware that all this remains subject to our Federal Government’s immigration policy. But right now there has been a marked increase in inquiries for ALL asset classes from international clients so we know they are very eager to secure residential, commercial, industrial, retail, englobo land and development opportunities.
There’s nothing to suggest Western Australia won’t remain a very appealing investment destination post-pandemic.