These are the numbers a Real Estate Institute CEO looks at; maybe you should too

When a state Real Estate Institute CEO says these are the figures she looks at when assessing the property market, it is probably worth paying heed and having a glimpse before making that next property investment move.

City backdrop with numbers overlaid.
Property investors could do worse than pay heed to the same figures a Real Estate Institute CEO weighs up. (Image source:

Predicting the movements in the property market is difficult as you never know when some unexpected event will occur and cause a significant change.

Covid is a prime example, with nobody anticipating the boost it would give the national property market.

Forecasting is not an exact science, but there are a number of figures I’m watching at the moment to get an idea of where the market may be headed.

Population growth

Population growth drives demand for housing, particularly migration.

As you can see from the below graph, migration to Western Australia declined during our extended property market downturn.

The state recorded negative net interstate migration over a number of years as people left the state. During the downturn demand for property fell and house and rent prices declined.

Right now there is almost record high population growth.

WA recorded 3.1 per cent population growth in the year to June 2023 according to the Australian Bureau of Statistics (ABS). This was the highest growth rate in the country.

There were more than 73,000 net arrivals in that time. If you assume there are 2.5 people per household, that means more than 29,000 more households needed accommodation.

When population growth starts to slow demand will ease as will the pressure on the property market.

This, however, is just part of the equation.

Building approvals and completion figures

A growing population needs to be housed and as the established homes market has a finite supply of properties, new homes need to be built.

Approvals give you an idea of how many homes may be coming and also the appetite for building. They aren’t always reflected in completions though. Again, Covid is a prime example. Building incentives saw a huge spike in sales and approvals, but this hasn’t translated into the same number of completions.

You can see the lag, as well as the discrepancy, between approvals and commencements in this graph.

As mentioned earlier, in the last financial year our population grew by about 29,000 households, yet only 14,000 new homes were completed. In addition, the Housing Industry Forecasting Group is only expecting 15,500 completions in 2023-24.

This shows a significant imbalance between supply and demand and indicates demand for established homes will remain strong for some time.

Another point of concern is the low number of apartment development commencements. This is also expected to remain low, leading to an undersupply in the unit market.

Mining capex figures

While it is good to look at overall economic data, WA’s economy is quite dependent on mining. Mining drives employment and employment opportunities drive population growth. As mining investment declined during the downturn, people left the state seeking employment elsewhere.

This graph shows the links between mining capital expenditure (capex) and property prices.

I like to look at mining capital expenditure forecasts as it gives an indication of where the industry is headed.

Mining capital expenditure is forecast to increase this financial year and actual expenditure tends to exceed forecast expenditure. This is good news for the economy and a positive indicator for the property market.

Article Q&A

What are three figures to consider when investing in Western Australian property?

Cath Hart, CEO, REIWA, says that predicting the movements in the property market is difficult but factors to consider in Western Australia include population growth, building approvals and completion figures, and mining capital expenditure.

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