Property Market Information: Increased foreign investment in Western Australian

By the resi financial blog team, 27 March 2014

Foreign investment in Western Australia

Anyone interested in taking out a commercial loan and buying property for their business in Perth over the coming months could be interested to hear about the latest release from real estate consultant group Knight Frank, which highlighted the expected patterns of growth for commercial real estate heading into the future.

During 2013, local institutes and private investors were the dominant figures in the Perth market, as the state started to feel the beginning of economic growth. In fact, 87 per cent of the $1.26 billion worth of commercial sales last year were from local buyers while foreign investors only accounted for 13 per cent.

However, the new year is expected to see a large increase in the number of international buyers entering into the Western Australia commercial property market.

Analysts from Knight Frank have illustrated a growing number of Asian investors aggressively investing in the market as local buyers begin to diminish, with a Singaporean company investing $205 million in January alone. There have also been increases in the number of investors from Malaysia and the United States.

"Investment opportunities in countries like Singapore and Malaysia are going to be limited, but Australia, and particularly Western Australia, look attractive due to the very strong economy," said Knight Frank Managing Director of Western Australia John Corbett in a March 20 statement.

"Domestic institutions, syndicators and private investors were certainly the dominant purchasers during 2013 but this year we will se increased activity from high net worth individuals and institutions from Asia, as well as some ongoing interest from North America."

He said the decreasing value of the Australian dollar has started to draw attention back to the country, as momentum begins to gather during 2014. Furthermore, return yields in Australia are considerably higher than elsewhere - reaching up to 8 per cent as opposed to below 3 per cent in Asia.

The majority of overseas interest was focused on securing commercial real estate in the central business district of Perth, as well as lots in shopping centres and hospitality assets. Furthermore, attitudes have changes towards property types. While the beginning of 2013 saw overseas investors focusing on developing plots and construction, the new year has seen a shift towards income generating assets.

With an increasing number of foreign investors in Western Australia on the horizon, this could be a great time to consider buying commercial property in the coming months in order to secure a great slice of real estate and establish yourself in the market ahead of the incoming investors. 

Due to the growing strength of the state, commercial property in the region offers a great investment opportunity. Furthermore, projected economic growth helps create a long term plan for you and your family. 

Categories: Business Owners, Home Loans, Property Investment