This article is from the Australian Property Journal archive
HOUSE prices in Western Australia should increase by 6% to 10% as the rental and sales market experiences growth over 2021.
Western Australian is expected to witness growth not seen since 2013, according to REIWA’s 2021 outlook, as the state shows positive signs of overcoming the challenges present by COVID-19, earlier in the year.
“Sales activity in Perth at the start of the year was sitting at approximately 2,900 transactions per month followed by an uptick where we are now seeing nearly
4,200 transactions,” said Damian Collins, president at REIWA.
At just above 10,000 listings for sale, listings are at a 13-year low with this low supply putting upwards pressure on house prices.
“With record low interest rates looking like they will be around for a while, many buyers are finding it cheaper to buy than rent. This is one of the reasons why we can expect sales activity in 2021 to continue gaining momentum,” said Collins.
Real estate agents have reportedly seen sellers receiving multiple offers on properties, thousands of dollars above the advertised price.
Over the year, Perth has the lowest medium house value of any Australian capital cities, though this could shift in 2021, as the population increases as people head home to WA from interstate and overseas. This should impact house prices, with the potential to increase by 10% in 2021.
The rental market in Perth has grown very competitive with vacancy levels reducing to below 1% under COVID-19 conditions, the population increasing by 1.5% in the 12 months to March 2020 and limited stock.
It is likely to grow more competitive before getting any better for renters, with 1,000 international arrivals expected per week and domestic borders opening.
The low supply has also but pressure on rental prices, pushing the median rent from $350 per week to $380, at an 8.5% increase.
“We can expect rents to grow an additional 10 to 15 per cent throughout 2021, however even with this increase, WA is still the most affordable capital city to rent in across all Australian states and territories” said Collins.
In regional WA, market conditions should improve over 2021, with the population growth and changing lifestyle preferences brought on by the global pandemic as demand for regional living increases across the country.
There have already been increases in demand and sales activity in areas such as Karratha, Port Hedland and Kalgoorie Boulder during the latter half of 2020.
“Increases in certain mining areas are due to companies moving their staff closer to the mining sites to live while the borders are closed. While this has put upward pressure on the rental and sales market, other regional centres are also experiencing lowered vacancy rates, limited rental stock and an increase in median rents,” said Collins.
Vacancy rates dropped from 0.9% to 0.4% in Albany, likewise Bunbury saw a drop from 3.1% to 0.7% and Geraldton from 5.1% to 1.5%.
“It will be interesting to see how working from home impacts lifestyle choices and if we see an increase in demand for regional properties in 2021 due to people opting for an alternative lifestyle while working from home,” concluded Collins.
