Perth real estate market heats up

om conditions return

Perth’s property market is set to experience conditions not seen since the mining boom, according to a range of professional forecasts.

ANZ economists expect Perth property to outperform all Australian capital cities in 2021.

They forecast Perth housing prices will jump as much as 12%, adding $47,500 to the median house price and $37,000 to the median unit price.

Factors driving the boom

Factors driving the anticipated price rise across the nation include historically low-interest rates, high levels of government stimulus, the reopening of domestic borders and improved economic activity as community transmission of COVID-19 is, hopefully, brought under control.

Specific factors driving Perth’s rise include the strong performance of the mining sector and a shortage of housing stock.

According to data from the Real Estate Institute of Western Australia (REIWA), December 2020 saw a jump of 42.5 per cent in house sales compared to December 2019.

REIWA president Damian Collins reported reduced travel during December had allowed people to benefit from the favourable real estate market.  Traditionally, December experiences a reduction in the number of house sales due to buyers going away for the festive period.  Yet this year, Perth experienced a significant increase in buyer activity, which suggests that people are taking advantage of the market conditions whilst they are unable to travel.

Perth’s average house price remained stable in December, sitting at $480,000, while REIWA data showed 45 per cent of suburbs saw an increase in property value during the month.

Perth’s market is shaping into an Investor’s dream

Perth remains very favourable for investors, with REIWA expecting Perth’s median house price to rise between 6 and 10 per cent during 2021.

The REIWA president encourages those who are thinking about purchasing their first home, trading up or investing, to act soon before prices inevitably rise.  Investors were reluctant to enter the declining market in the past five years. But with a rising market, full occupancy and interest rates at a record low, investors will start to re-enter the market and create more stock for tenants.

Perth rents set to continue increasing

There were 3,655 properties leased in Perth’s rental market in December, a 9 per cent increase on the previous month.

REIWA warned in October that Perth was in a ‘rental crisis’, as vacancies reached their lowest level in 13 years, falling below 1% for only the third time in 40 years.

REIWA president Damian Collins said it was pleasing to see the rental market pick up in a time when activity traditionally slowed down.

As the rental stock levels continue to remain low,  it is likely to expect rents to continue increasing and could rise a further 10-15 % in 2021, particularly as travel restrictions ease, however Mr Collins advises that we need to remember that rents are still a lot cheaper than they were in 2014 and even with the increases in rents, WA is still the most affordable of all the Australian states and territories.

We continue to see the decline in the amount of property on the market, but consider the fact the big property players are beginning to put more supply in place.

Now is the time to take action

If you’re interested in finding out if you can take advantage of the Perth real estate property market, the finance specialists at Custom Financial Solutions are only too happy to have a chat to you about options available to you.