All around the country, in fact the world, a large majority of the information which hits the news reels each day are capital city centric. This also includes property news.
The fortunes or misfortunes of property markets within each state and territory often gets wrapped in whatever is occurring within the capital city. The reality is that the property markets of the various regional towns within that state may be a stark contrast to the big brother capital.
What I’ve just described is currently very applicable to Western Australia. A downturn in iron ore prices combined with the completion of the construction stage of a few very large mining projects has resulted in diminished demand for property (and falling values) in the Pilbara. Thousands of managerial and administration jobs shed in the state’s capital plus a significant increase in housing supply have combined to cause Perth property values to decline.
Meanwhile, a completely different mix of economic drivers in regional cities like Bunbury provide real cause for optimism for its property market. Located on picturesque coastline 180 kilometres south of Perth, Bunbury is a hub for business, industry, culture and shopping. With a population of approximately 35,000 people, it is one of the fastest growing regional cities in Australia.
Western Australia’s unofficial second capital city has evolved in to the main service centre for the south-west regional population of 130,000 people.
When Propertyology took a more forensic look at Bunbury’s economy we discovered that an extra 2,000 jobs were created from January 2013 to November 2015. That’s the opposite to the mass job shedding that is likely to continue further north in the state.
Mayor Gary Brennan’s vision for Bunbury to be a very progressive city is indicative of the modern infrastructure and construction being the city’s biggest industry employer. The region is rich with minerals including alumina, mineral sands, silica, and coal. Processing of these commodities feeds a thriving a local manufacturing industry. The Worsley Alumina recently completed a refinery expansion plus an upgrade of its facilities at the Bunbury Port.
The port also services the region’s farming (sheep and beef) and timber industries. Andrew Forrest purchased local beef processor, Harvey Beef, in 2014. China’s biggest importer of Australian red meat, Grand Farm, was also part of a $1 billion joint venture in 2014. Already one of the busiest regional ports in Australia, state government planning provides for further expansion to double the port’s capacity and upgrading both rail and road freight infrastructure.
Over 400,000 people visit Bunbury each year for its beaches, wineries, scenery, and restaurants. Approximately 85% of these visitors are Western Australian residents. Retail facilities in Bunbury are first rate. Education facilities include public and private schools plus tertiary education through the Edith Cowan University and South West Institute of Technology.
According to the ABS, Bunbury had the highest population growth rate in Australia in 2005/6. Over the three year period 2004 to 2006, the Bunbury median house price increased by a whopping 85%. New housing supply eventually caught up with demand and subdued property price growth subsequently followed from 2007 onwards.
With promising times ahead for the region’s tourism, agriculture, and manufacturing industries, there is every reason for optimism for the property market of Bunbury.
Mark my words, it will outperform Perth!