The Perth Greenfield land market has been struggling for the past four quarters. The good news! The market is unlikely to experience any further falls in sale volumes. The performance of the mining sector is now moving in the right direction.
Perth land market driven by a strong economy.
The performance of the Perth Greenfield land market has largely be dependent upon a strong economy. This in turn, has been able to attract a larger share of the nation’s net overseas migration intake.
New land production levels likely to exceed 2000.
The volume of new lots released so far this survey has now surpassed the total number of lots released for the September 2016 quarter. It is likely that the Perth land market will put an additional 2,300 new lots into the local market this survey period. Based on a conservative sale to production ratio [ conservative being 77 percent ] land sale volumes should lift by 10-15%. In a normal market sales will closely align to production levels. A sales to production ratio less than 80% indicates a market in trouble. Normally, land estates will pull back on lot production in order to balance the supply/ demand equation.
With Perth land estates struggling to clear past production levels, the current increase in production may signal a positive event.
Perth land market 12 months into an 18 month weak phase.
Perth typically sits at the bottom of its cycle for 18 months [ 2010 2011 period] it’s now been 12 months sitting at “rock bottom”. The Dec results will be worth watching.