This article is from the Australian Property Journal archive
AFTER a strong start to 2021, Western Australia’s house prices are forecast to increase by 15% over 2021.
REIWA initially predicted a value increase of up to 10% for 2021, however this figure has jumped by 5% since estimations made in November of 2020.
This revised forecast comes after three months of strong price growth in 2021, with CoreLogic’s home value index for Perth increasing by 5% in the three months to April this year.
“We hit the bottom of the market around June last year following the COVID-19 lockdown and since then consumer confidence has returned. Buyers who were waiting for the bottom to hit are now eager to get into the market and take advantage of the record low interest rates,” said Damian Collins, president of REIWA.
Additionally, Western Australia remains the most affordable state when looking at household income up against median house prices, compared to the rest of the country.
“There is also a fundamental imbalance between supply and demand in the sales market right now, with more buyers looking for property than there are houses listed for sale. Buyers must act quickly and in competition with one another to secure a property, which is driving up house prices,” added Collins.
In Perth the median house price at sale sits at $495,000, which is still below the capital city’s highest recorded median price in 2014, at $550,000.
Investors in are also confident in their local market, with a recent survey revealing 78% of Perth investors believe their own market in the best place to invest in for 2021.
“When you factor all of these components in, it is a perfect storm for higher-than-expected house price growth this year. We need to get more homes and apartments built. Until we see supply catch up with demand, we will see prices continue to rise,” concluded Collins.
