Is Western Australia on the mend?
The A ‘n’ Z of Economics - Episode 2 - “Is Western Australia on the mend?” | January, 2018
As the resources downturn hurt Perth, there was widespread concern about how long the hard times would last. There are clearly ongoing challenges but the cranes are back in Perth. The demand for labour is growing. Across the state, people are becoming more confident. There are preliminary positive signs for the resource state, with growth going beyond mines and wells this time.
In this podcast, ANZ’s Senior Economist Cherelle Murphy chats to managing director of Burgess Rawson Andrew McKerracher a leader in Perth commercial real estate and businessman Andy Freeman who owns and runs a number of popular bars and restaurants about the WA economy.
“I think the consensus at the moment is there is green shoots.”
Andy Freeman: The consensus at the moment is there is green shoots. The spirit in the city is better. There's a lot of talk of tourism, which is great, the government might be focusing on that direction and I think that's probably been the lacklustre thing that has been neglected over the last few years…
Cherelle Murphy: And Andrew in your industry has there had to be some creative thinking about how to get through the tough few years?
Andrew McKerracher: I think we had to get back to a lot of basics. I mean our industry benefited from it, a huge wave of enthusiasm for commercial property and now we've had to focus on things just the basics, like reducing the prices. Speaking to the vendors, just getting them to understand but when I first started 23 odd years ago the press wasn't the same as it is now. Now the vendors are as well educated about property prices as the real estate agents are. So a lot of them you engage in the conversation and it's just something they say look we're going to have to meet the market. We know where the market is at now and it's an easy it's an easy conversation. Twenty odd years ago we didn't have the degree of analysis that we have now so it was a much more difficult conversation. So I think that's really it just got back to basics.
Cherelle Murphy: I was interested driving around the city today I noticed there's quite a few cranes on the skyline now, Woodside obviously seems to be just about close to finishing its new building, is this is this a sort of a visual illusion or is it a bit of construction still going on in the city?
Andrew McKerracher: No there's still a lot of construction going on in the city and you've still got cranes out in the suburban areas as well. I mean you go down to Scarborough there's big redevelopment going on down there there's a lot of cranes there and scattered through other areas as well… We're seeing more cranes now. I've had people come to Perth and I say gee there’s so many cranes. I thought the economy was suffering over here. All I can see is all these cranes. So it's good having cranes it does send a sense of positivity that things are happening and a crane on the horizon is a healthy thing.
Cherelle Murphy: If we can just turn to the consumer, the retail offering obviously has changed so much in Australia and the world really… But for the WA consumer how are things looking at the moment? I noticed that you've mentioned in the past Andy that the WA consumer has become a lot more sophisticated…
Andy Freeman: Yeah. I mean there's definitely been an evolution I think cheaper airfares, cheaper airlines, Internet, Facebook, Instagram all these platforms and mediums gives people access to things that maybe 10 years ago for example they wouldn't have seen or wouldn't have known about … It's a sign that the consumer is definitely looking for something else and we've got constant evolution happening within our company because the customer knows what they want and they keep pushing and there's an expectation if you rest on your laurels then you know you lose. So it's actually quite exciting and I like it. It’s moving to the left and then it's to the right. You do have to be on your toes, you've got to have your finger on the pulse and you've got to be out there talking to these people. But yeah there's you know a big sort of education or just their knowledge and expectation is far more advanced than a decade ago for sure.
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