State of Markets – WA March 2012

WESTERN AUSTRALIA

Housing values to surge in Perth
While units outperformed houses in Perth last year, there will be a resurgence in house prices, according to a new study.

House prices saw a downturn of 5.2 per cent in 2011, while units decreased by 3.3 per cent, the Australian Property Monitors (APM) House Price Report found.

However, house prices are set to grow, according to APM forecasts.

“Perth offers one of the best prospects for prices growth in 2012 with a significant increase in buyer activity,” the report says.

“With recessed house prices, together with low levels of new construction and a flood of workers seeking the wages bonanza delivered by nearly $100 billion in mining activity, Perth house prices have the clear potential to rise by a double-digit percentage.”

APM senior economist Andrew Wilson explained that decreases were due to low buyer confidence, particularly over the September 2011 quarter.

“Buyer wariness over the quarter was exacerbated by growing concerns over the state of the international economy, a weakening stock market and

a softening of economic activity,” he said.

BHP confirms $690m Pilbara project
BHP Billiton has confirmed that a satellite mine project worth just under $690 million will be developed in the Pilbara region.

The Orebody 24 mine is part of the Mt Whaleback operation, the world’s biggest single-pit, open-cut iron ore mine.

“Orebody 24 is a sustaining mine to maintain iron ore production output from the Newman Joint Venture operations,” BHP Billiton said in a statement.
Production is set to begin later this year.

The building of the mine includes construction of a train loadout facility, a rail spur and other supporting infrastructure.

“The Orebody 24 development is consistent with our strategy to invest in high quality, expandable resource basins and highlights the benefits of our ability to leverage existing infrastructure to sustain current production,” Iron Ore president Ian Ashby said.