Things Looking Rosier in Perth

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Written by Marc Pallisco   
Thursday, 13 January 2011 00:44

THE value of apartments within inner-city Perth is set to surge this year, linked to stronger corporate profits.

Research group MacroPlan says slowing growth in corporate profits in 2008 and 2009 led to the cancellation or deferral of some mining construction work, and that as a consequence, commercial and residential development also slowed.

In its Outlook for Perth Housing Construction report, analyst Jason Anderson says this trend should be reversed as demand for construction contractors and professional services firms increases. Several major Western Australian mining projects are back on the cards, too.

The report estimates Perth’s median house value will jump from $490,000 today to $600,000 by June 2014. It expects land prices to rise an average 6.4 per cent annually for the next five years.

The report, detailed in the AFR, also tips interest rates will peak at about 9.1 per cent in 2013 – at about the same time a weaker cycle will start in the residential housing sector.