Perth Real Estate
The property market in Perth has been lacklustre at best. In mid-2015 the economic boom set in motion by the mining industry ended. With it, the growth in property and home prices slowed to a crawl. That crawl finally turned into a steep nosedive. This saw house prices decline over the following 5 + years. However, the tide has now turned and Perth is set for a property renaissance.
Despite a global pandemic causing financial instability across the globe, the end of 2020 saw house prices in Perth rise 2.8% in the final three months. The average rent price also increased from $440 in January, to $493 in December of the same year.
The number of sold homes also increased in 2020, despite advertised properties declining drastically. This has created a seller’s market, in which those hoping to sell property clearly have the upper hand. All of this has resulted in analysts upgrading forecasts for the city and surrounding WA area, with some expecting prices to rise as high as 12%.
Why the Sudden Change?
Why this is happening comes down to a number of factors, the first being the extremely low-interest rates. Due to the impact of COVID, the Bank of Australia pushed, already lowinterest rates down to record lows. With a very successful lockdown in place in WA, it has meant that people have largely been able to live a normal life, with the added bonus of low rates.
The pandemic must also be considered as a factor. With a ban on travel, many residents in WA no longer have huge summer travel plans. That means money that would be spent on a holiday is now going on a deposit for a Perth investment property.
The dip at the start of the pandemic saw prices drop before the take-off. This may have acted as a green light for many who had been waiting to buy, striking while prices were low. Pushed on by a stamp duty break, the incentive was in place for people to buy.
Many Australian Citizens are also returning from overseas and other coming home from other states together with people migrating from other states too. With Perth’s outstanding safety record during the pandemic, its reputation as a safe and efficient state is undoubtedly a draw for many buyers.
Finally, a slowdown in construction during the downturn has meant that many of the newer properties that were on the market have been sold. With less being built, the demand has started to outstrip the supply.
Value is also picking up across the whole housing spectrum. For example, areas that are in the lower 25% of property price bands such as Medina and Calista, have prices that are rising. This is likely to be due to the influx of first-time buyers.
It is not only first-time buyers who are buying. Luxury and high-end properties are also seeing the same economic boom, particularly in the $5 plus price brackets.
All of this results in stamp duty revenue for the government of WA. They expect to make $411 million in stamp duty over the next four years. It is believed as much as 950 properties per week can change hands, making it a lucrative economy for the government.
Competition for properties has also become fiercely competitive. In many cases, bids are being placed way above asking prices. These are often on the condition that it does not go to a first home open so that the person secures the property.
Winthrop, Leederville and Kingsley are three suburbs where property prices have boomed in the past few months. With houses taking an average of only 6 days to sell, it is a stark contrast to the previous average of 14 days. Second to this are Darch, Carine and Coolbellup.
However, these suburbs are just the start of what a rapidaly changing property value landscape. This is happening not just across Perth metro area, but the entire State.
Working from home provisions have seen buyers move into rural locations or beachside retreats, pushing them out of the inner city. This has increased property values not just in Perth, but Sydney, Melbourne and other large cities and regional centres.
For anyone renting out a property, the news is just as good. Rental vacancies have hit the lowest on record, at an astounding 40-year low of 0.8%. This has been a trend that has continued for the last 25 months, in which rental vacancy rates have remained below 3%.
When this is combined with the fact that Perth remains the cheapest capital for rent in Australia, it becomes a great prospect for anyone looking to rent. It is expected that the lowest vacancy rate will be reached in early 2021. This should return to normal when travel restrictions and the COVID situation alleviates, meaning people are more willing to move on or increase their family occupancy.
It will also see investors try to fill a gap in the market. With rental vacancies so low, it is inevitable that people will want to purchase rental properties as soon as they can to make up for the shortfall. This is another factor that could increase housing sales.
Start the Search Today!
Now you know the reasons that now is the time to invest in Perth real estate, you need to find the right property. In the current market, this is almost impossible to do without a great estate agent. Find one that comes recommended highly that knows the areas and type of property you want to buy.
Your first stop should be Vivid Property Perth. We thrive on connecting people with property across the Perth metro area. Contact us to discuss your needs and let us help you find a great investment property to either start or add to your property portfolio.