Government initiatives in a region are one of the strongest drives of investments and economic growth. Local governments can create favourable business conditions by offering incentives, such as reduced taxation or loan guarantees.
According to Zaki Ameer of DDP Property The Perth City Deal is one example of how regional governments can influence investments in property. It is expected to come as a game-changer for Perth, boosting economic conditions and increasing the investor-friendliness of the region.
Under the Perth City Deal, local and federal governments work together to improve the community’s economic and social outcomes. It includes investment in infrastructure, better public transport, and more housing projects. Here’s a closer look at the influence of this deal on property investments.
What Does the Perth City Deal Include?
The Perth City Deal is an attempt to re-energize the region’s economy and create more jobs. It will create 10,000 jobs and bring investments – both private and government – to the central business district. Here are some highlighting features of this plan.
The WA government and the Australian government will invest $20 million each to increase sustainability in the region. It will involve building new waste-management infrastructure, such as a resource recovery facility and a recycling hub to reduce landfill pollution.
All City Deal projects will also be required to use recyclable materials if and when possible. In doing so, the government wants to meet the country’s National Waste Targets, lowering the total waste generated by each person in the country by 10% by 2030.
The City of Perth and the WA government will also develop a Strategic Plan to make Perth an attractive city for visitors and residents alike. The plan will ensure the city has the amenities and services needed to make it a vibrant and welcoming place.
It will focus on making public spaces colourful, green, and accessible. The plan will also aim to attract new businesses, increase investments from both the public and private sectors, and create more local jobs.
The central business district of any city requires a network of roads and public transport options to be successful. Perth City Deal will invest in an integrated transport plan to modernise the city’s transportation system. Here’s how the $105 million investment will be broken up:
- $10 million by the City of Perth
- $47.5 million by the WA government
- $47.5 million by the Australian government
The transport plan will also include street greening components like bike lanes and pedestrian paths. It will contribute to making Perth more sustainable and comfortable for residents while lowering the heat island effect in the city centre.
Edith Cowan University’s Cultural and Creative Industries CBD Campus
The ECU is a $695 million project expected to create 380 ongoing jobs and 3,000 construction jobs. The campus will have an estimated 9,200 students by 2025 and 11,000 by 2034.
Most importantly, the project will bring a $1.5 billion economic stimulus to the Perth economy. The world-class campus will be an amalgamation of culture, business, creativity, and technology. It will offer programs related to business, technology, cyber security, creative arts, and more.
How Will the Perth City Deal Drive Real Estate Investments?
There are many facets to how the Perth City Deal plans to drive investments in the local real estate market. Here are some of them.
Increased Jobs and Migration
Every aspect of the Perth City Deal is aimed at encouraging migration and job creation, which will, in turn, drive demand for rental properties. The increased demand should help drive up the property values that landlords can set for their properties. Meanwhile, the rising population should create a diverse range of tenants who will be willing to pay premium prices for quality rentals.
Influx of Students
Besides the ECU, the deal also includes the creation of Curtin University’s Historical Heart Cluster by 2023, which will bring in an additional 5,400 students.
Since many of these students will come from other cities or countries, they’ll need rentals. With thousands of students coming to the city, investors can expect a tight market with high demand for student rentals.
Perth already has a high growth value compared to other cities, with Kwinana having the highest growth at 10.1%. Meanwhile, the property growth value for Rockingham was 9.7%, followed by 8.7% for Mandurah. As the population of the city increases, the property values will also see a corresponding increase.
The Perth City Deal also includes plans to improve infrastructure, such as better public transport links, new roads, and improved access to the Perth Airport. It will increase the appeal of the city, potentially drawing more people in who want to live there.
When people consider the livability of a city, they account for pretty much everything included in the Perth City Deal. The deal also appeals to the subjective factors (driven by personal interests rather than basic life needs) of potential residents.
For example, the deal includes the restoration of the Perth Concert Hall, which will be made into a top-tier performance space with a $52.4 million redevelopment investment. Another similar incentive is the Causeway Pedestrian and Cyclist Bridge, a $100 million project with dedicated lanes for cyclists and pedestrians, going all the way to the city’s CBD.
With so many facilities and improvements in the recreational space, Perth is turning into an attractive place to live, making it a prime spot for real estate investments.
Where to Invest?
Since the Perth City Deal covers the whole of Perth, no one area is more attractive than another. However, areas in the city’s northern suburbs may be a better choice for investors, as they’re generally more affordable.
But if you’re hoping for a higher return on investment, opt for CBD. Zaki Ameer of DDP Property advises that the median price for a house in Perth is $540,000, with a median rent of $545 per week.
Units have a median rent of $470 per week and a median price of $400,000. In 2022, there was an increase in the trend of buying units instead of houses, as they are cheaper and more affordable.
Rest assured; the Perth City Deal will be a stimulant for the real estate market. As the city continues to grow and develop, so will the growth of investments in Perth’s real estate industry. It’s about time you dive in too.