I often hear on property forums or general market commentary about people advising not to invest Perth as it is a boom or bust town, too reliant on iron ore.
Yes, it’s true that Perth was swept up in the largest historical iron ore boom we have seen.
As the boom slowed down, we saw the longest period of negative property price growth in history. This was an unusual event and one that we hope to never see again.
Looking historically at 60 years of Perth property price data (REWA) we’ve only seen 5 isolated years of negative growth before the boom of 2008. The worst year being 1961 of around -5%, then 1972, 1979, 1982 and 1991 all seeing less than 5% of negative growth.
Each of these periods were followed by solid periods of sustained capital growth, with 8 of those years being 20% or above and back in 1975, more than 40%. None were followed by long periods of negative growth.
If you look at the 10 year average price growth data over this 60 year period, the 10 year averages have been steady around 8-12% until things went a little crazy from 2004 and then of course we saw the correction from 2014 to 2019.
As always with statistical data you need to look further back than recent memory to get a true understanding of a market.
While all eyes are on the east coast with their historical record growth over the past few years, we need to look where the next opportunities are.
As the worlds greatest investor Warren Buffet once said “be fearful when others are greedy, and greedy when others are fearful”