- The WA economy is looking very strong right now, argues Wouter Jellema
- Commercial properties are leasing fast, and future prospects look strong
- It could be a good time to invest in commercial property, he says
Currently, everyone seems to be talking about the economy.
Over here in WA, Premier Mark McGowan handed down his first budget as treasurer last week, expecting to bank a $5.6 billion surplus from 2020-21 for WA.
We receive this news as the rest of the country is still struggling with lockdowns and Covid-19 financially related sacrifices. We hear and see many updates about the residential rental market and mining, iron ore, and construction industries going off the charts.
The Property Tribune has reported many updates about the country’s current economic climate.
Last week, there was plenty of reaction from the property industry on WA Premier Mark McGowan’s budget and how WA remained the cheapest state for housing.
Earlier this week, it noted how WA did not have its normal cooling down factors over the winter period. Meanwhile, REIWA President Damian Collins expressed how impressive it was that so many Perth suburbs still recorded median house sale price growth.
We also saw how the Sydney residential rental market has the lowest vacancies in three years, and that the Victorian Government is handing out grants to commercial landlords who waive half the rent to their lessees as an incentive to assist Victorians during their sixth lockdown.
Commercial landlords in WA
Commercial leasing had an excellent run in the third and fourth quarters of 2020, where lots of leasing deals occurred.
Many properties that had been listed for lease for years finally found tenants to move into these premises.
Property owners experienced quick movements with their properties if a tenant was moving out. A short vacancy period was often the result.
Since then, we have seen the market slowly, but steadily, growing.
Based on all these positive factors, with strong industrial growth, businesses doing well, borders that will eventually open, and more residential properties being occupied by working West Australians, I foresee that the steady growth that we have seen in the past nine months will continue for the next three to five years.
It is a strong statement to make, I realise, as nobody can predict the future.
However, in my opinion, owning or investing in commercial property at the current moment is an ideal time, as we are only still in the initial phase of growth, with further predicted growth to come, as per the feedback received from many specialists from the industry.
A good time to buy?
In conclusion, owning commercial real estate is never easy and is a big commitment.
However, suppose your accountant, financial advisor, and financial broker believe that you have the grounds to invest and hold commercial property. In that case, if you feel ready and willing to own commercial property and rent your asset to a strong business located here in West Australia, in my view, now is the right moment to own commercial real estate.