- Border reopening to boost vendor and buyer pool, says Knight Frank's Head of WA
- Renewed confidence in market as stability and affordability of WA attracts investors
- Rising Covid-19 case numbers unlikely to deter interest, with WA well-equipped
With Western Australian’s borders now fully open (well, for the triple vaccinated at least), the question of how the reopening will affect the state’s property market is at the forefront of minds.
According to Craig Dawson, Knight Frank‘s Head of Western Australia, positive impacts are in store for the commercial real estate sector once shut-out buyers are allowed to return.
Reopening to revitalise vendor and buyer activity
Mr Dawson believes the scheduled dismantling of borders on Thursday will significantly strengthen activity in the commercial sector, bringing more vendors and buyers to the table.
“We expect more vendors to list their properties as it is anticipated there will be a bigger buyer pool with more people able to come into Perth,” said Mr Dawson.
Mr Dawson highlighted the at times dismal results of last year, when high-value office buildings within Perth’s CBD failed to sell due to the lack of interstate and overseas investors in the market.
“The buyers for these types of assets would typically have come from either eastern Australia or South East Asia, and because neither of these could get into Perth the buyer pool was considerably reduced.
“Property owners are now buoyed by the fact that borders will reopen on Thursday, and indeed we are seeing renewed confidence across the state’s whole commercial property market,” Mr Dawson continued.
Stability and affordability attracting investors to Perth
The stability of Western Australia’s economy will be fundamental in the resurgence of investor interest in the state, set to draw investors back rapidly once the border opens.
“We expect there will be an influx of investors coming to look at properties in WA, not only because they physically can now, but because of the economic strength of our state.
“We have a strong and stable economy, with the mining sector continuing to perform well and a gradual decline in Perth’s office vacancy rate,” said Mr Dawson.
While investors have had a much easier time accessing the markets over East while WA remained under lock and key, many have held back waiting to enter the more attractive market in Perth.
“While Sydney has a similar story to tell in terms of a rise in activity following the end of lockdowns and borders reopening, many investors will choose Perth over the eastern states.”
Craig Dawson, Knight Frank
“This is due to our economic fundamentals as well as the affordability factor, with the yield spread remaining attractive compared to East Coast markets, with the backdrop of interest rates weighing on investors,” he said.
As for if the rapidly rising cases of Covid-19 throughout the state will deter investors, the outlook remains positive.
Despite local Covid-19 cases reaching an all-time high of 1766 just a day ahead of the border reopening, Mr Dawson does not foresee case numbers negating the benefits of the border reopening.
Instead, Mr Dawson pointed to the expectations that case numbers will peak at the end of March, from which WA will likely return to a new normal quickly if we are to follow in the footsteps of the other states.
“We haven’t seen the full effect of Covid yet but arguably WA is more prepared than any other state was, with high vaccination rates, and there is a sense that we are getting on with it,” Mr Dawson concluded.
