The Perth Property Market Outlook – Update
It’s been a unique year for Perth’s property market as WA has navigated the impacts of COVID-19. While garnering national attention in early 2020 when four consecutive months of price growth indicated the progression of recovery for Perth property, the market emerged strongly following a brief pause in activity under lockdown restrictions, supported in turn by low stock levels and high resilience from sellers.
As we move further into the latter months of 2020, the market continues to strengthen, with a sustained rise in buyer activity (tracking on average 40-50% higher than the same period in 2019) and a continued lowering in combined stock on market supporting a rebound in market growth. CoreLogic’s Home Index report showed a 0.6% increase in dwelling values in October – the second consecutive month of headline price movements.
Gross Rental Yields | Australia 2020
Tightening stock levels have had an even greater impact on Perth’s rental market, with vacancy rates reaching a 13-year low of 0.95% this month as rental stock remains below 3000. Despite temporary COVID-19 legislation, these conditions are already placing upwards pressure on rental prices as tenants compete for properties, with median rents rising to $375 in October (REIWA).
While activity continues to track higher, the Real Estate Institute of Australia’s June Housing Affordability Report showed that Perth was once again the cheapest State across Australia to purchase property, with only 24% of family income required to meet loan repayments compared to the Australia-wide average of 34.5%.
These conditions are offering a unique set of conditions for both local and interstate investors, with the lower barrier to entry providing opportunities for buyers to access properties with larger land content, and located closer to the CBD than they would achieve in other markets across Australia.
Change in Rents
Looking ahead, these conditions have seen a number of leading economists forecast strong growth projections for Perth. ANZ are predicting 12% price growth next year, with Westpac forecasting an 18% surge from mid-2021. Momentum Wealth’s buyer’s agents are already seeing improving conditions translate into strong growth across some market segments, particularly in established suburbs where tightening stock levels are being further compounded by limited oncoming supply.
Rental Stock Perth
For more insights into Perth’s market indicators, or to explore the current trends in more detail, download Momentum Wealth’s latest market report here.
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