Western Australian Property Market Continues to Grow
Western Australia’s property market is staying strong with Perth’s median house price reaching above $500,000 for the first time since December 2018, according to the latest reiwa.com data.
If back-to-back quarterly price growth continues this year, Perth house prices will surpass the 2014 peak, having already reached their highest level in just over five years.
While the national home value index slowed from its 32 year high growth in March of 2.8%, we still saw housing values lift by 1.8% in April. With 6.8% growth over the past three months, housing values are still rising at a rapid pace, and are already 10.2% higher than the COVID low in September last year.
Perth’s home value index recorded a rate of growth of 0.8% in April, marking nine consecutive months of price increases. Since August 2020, the Perth home value index has increased 9.1% and for 2021 alone is up 5.9%.
Whilst for sale listings in Perth increased by 5.8% during the month of April, demand is still outweighing supply, and it’s becoming a buyer versus buyer market according to some industry experts, with multiple offers being received for almost all properties.
The average selling time in Perth is now less than two weeks, two days quicker than in March 2021 and 24 days less than the same time last year. Although there are more properties available for sale, buyers are out in force and competition is high, meaning sellers continue to enjoy the quickest turn around in sale times in over 15 years.
Perth Suburbs Moving Up
The five biggest growth suburbs for April were Bullsbrook (up 7.8% to $352,500), Bicton (up 6.6% to $1.14 million), Wilson (up 3.9% to $533,500), Mount Lawley (up 3.5% to $1.035 million) and Secret Harbour (up 3.3% to $445,500). Swanbourne, South Perth, Mandurah, Pinjarra and Victoria Park also performed well, with an increase in average sale price.
Perth’s premium market is gaining momentum too, as tight boarders mean fewer people leaving WA, keeping the wealth in the market. Instead of moving to Sydney or Melbourne, people are reassessing and staying in WA, putting that money into residential housing.
There has also been an increase in interstate and international interest in Perth, which will start prices moving upward at the top end of the property market.
Consumer Confidence at an 11-year Peak
Economic data released this month shows consumer confidence is the strongest it’s been since 2010. According to Westpac and the Melbourne Institute, the Index of Consumer Sentiment lifted 6.2% in April to 118.8, the highest reading since August 2010. Confidence rose by 10.5% to a record high (since records began in 1996) of 131.1 for Australians aged 25-44 years. The ‘mortgager’ confidence sub-index rose by 11.1% to an all-time high of 128.7. And confidence for ‘tradies’ jumped 18.5% in the month to a record 140.1. Readings above 100 points denote optimism, which means that overall, Australian consumers are feeling upbeat.
Australians haven’t been this optimistic since Australia was in the middle of the mining boom. In fact, sentiment is now at the highest level since August 2010, when Australia was rebounding from the Global Financial Crisis
Given the negative news flow around the recent expiry of the government’s JobKeeper wage subsidy and the delayed COVID vaccine rollout, the results are quite remarkable. Continued success with controlling the virus, rock bottom mortgage rates, rising asset prices, elevated savings buffers and better job security are boosting consumer confidence to levels higher than we saw pre pandemic.
Investors Are Back
Lending for housing investment has grown to $462 million in March, a five-year high. Increasing property prices, high demand for rentals and high yields have enticed investors back into the market.
Property investment in WA doubled within the past year, at an increase of 12% month on month.
Until recently, new borrowing has been driven by owner occupiers and first home buyers in particular. Now, the latest data released by the Australian Bureau of Statistics shows, the increase is in investor activity. This has been evident with the level of enquiry we have been getting since late last year from investors buying into the Perth market.
When it comes to investing in property, its important you have a plan, do your research and get the right advice.
Perth Rentals on par with Melbourne
The March 2021 quarter CPI figures show that the cost of renting a house in Australia has reached record high levels, with prices increasing almost all across the country since the pandemic, according to the Real Estate Institute of Australia (REIA).
Experts say the country’s rental market has made a “remarkable” recovery. Even smaller cities are recording massive jumps in rents after years of flat growth.
Perth tenants face the highest asking rents in almost six years, with the city recording the biggest annual price jump of all the Australian capitals, a staggering 14.7% rise to an average of $430. In just six months, Perth has gone from being the most affordable capital city to being more expensive than Adelaide. House rents are now on par with Melbourne.
Domain’s senior research analyst Nicola Powell said with international borders still closed and overseas migration at a near-standstill, the recovery was “quite astounding”.
Reduced investor activity over the past year resulted in less rental stock to choose from and now the moratorium on rental hikes and evictions has lifted, many tenants are experiencing an increase in rents that were at “below market rates” last year, she said.
The rate of growth was concerning, Dr Powell said, given that international factors had not returned to normal yet.
“If we’re seeing record high rents now, what is this going to mean when our international borders re-open and we welcome back foreign students numbers and overseas migrants? The pressure that will place on our rental market will be fairly great,” Dr Powell said
Dr Powell said the end of the state government rental moratorium on evictions and rental hikes could spark further movement by tenants in the market. Experts don’t foresee any real changes to the current high demand and competition conditions we find ourselves in for at least the next three months.
Outlook for Perth
Buyers are still reporting low levels of stock and well priced property in high demand areas is selling quickly. Most good and well-priced property is being sold in the first weekend with multiple offers being achieved.
Getting access to more opportunities, without the competition and pressure of other buyers is a great option. As a buyers agent, we can connect you with these prospects, providing greater potential. We can turn to our close network and connections to locate off market opportunities. We can put some strategies in place to help you meet your property goals. Many properties are now being marketed without prices, this makes it difficult to valuate, we can also provide “appraise and negotiation” only services to help provide you with a better understanding on the value of a property.
If you would like to chat to our buyers agent about your property requirements and strategy, please give us a call on 0401774715 or email us today firstname.lastname@example.org
Resolve Property Solutions is an independent and qualified Buyer’s Agent specialising in Perth property. We will work hard for you to help your search, negotiate and secure your property goals at the best possible price.
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