WA real estate market primed | western australia
Western Australia’s housing market continues to be the most affordable of any major Australian capital, according to recent data from CoreLogic.
But there’s no doubt that the rising cost of food, fuel, healthcare and housing is straining the purse strings of many people looking for their ideal home.
Looking at what’s in store for the WA residential property market in 2022, Managing Director and Founder of Realmark John Percudani said sentiment among buyers, sellers and investors remains positive.
“Perth is Australia’s fourth largest city and is now Australia’s most affordable city,” he said. “Interstate migration will be attracted to the WA housing market due to economic factors.
“WA’s labor markets are tight, with unemployment below 4% and employment growing at 6% a year, which is the fastest of any state in Australia, making the move to WA for employment a very attractive prospect.
“Combined with affordability and investment prospects, WA is a prime market for buying property in Australia.”
Mr. Percudani said registrations remained low while the absorption rate of new registrations was high.
Border closures have had a major influence on Western Australia’s housing market in recent months, but as state borders are now open, the rise in international and interstate migration will have a corresponding impact on rentals. and buyer demand.
“Demand continues at a ratio of one to two sales per ad to be ahead of supply,” Percudani said.
“Listings that are added to the market clear very quickly, which alleviates the apparent lack of available inventory.”
In Perth, current listings are down 6.2% from the same period last year due to transaction activity and housing demand in Washington State.
“What we can see for supply is listing flows approaching five-year average trends, and underlying it we’re seeing growing demand for market valuations,” Percudani said.
“This is normally a precursor to adding stock to the market.
“The market will continue to be ahead of supply in 2022, but the balance could create healthier and more sustainable market conditions.”
Mr Percudani said rental stock had tightened in Perth and key regional markets.
“The rental market has continued low supply and low vacancy rates, which underpins a clear indication of housing demand in WA,” he said.
“This trend is expected to continue through 2022, with continued strong demand and sluggish supply of new rental properties.”
Housing prices consistently and significantly outpaced income growth, but demographic tailwinds, low inventory levels and continued demand for coastal or tree-changing housing options kept prices upside down. from WA.
The affordability of the housing market created tight access to properties and with limited supply in listing levels it was difficult for first time buyers to buy a home.
“With more active and informed buyers in the market and prices remaining positive, it continues to be a favorable seller’s market in WA,” Mr Percudani said.
“If you are a seller, you must have confidence in the market; you now have a better opportunity to have a rewarding sales result.
“When buyers to ads are in a one-to-two ratio, a sales outcome is essentially assured.”
However, it’s important that sellers don’t always jump at the first offer.
“Make sure your property is not subject to a quick sale approach, as data indicates that properties sold off-market or when first opened may risk a drop in sale price,” Ms. Percudani.
“It’s about offering a smart sell and not just a quick sell.
“Ultimately, if there was a time to leverage great sales, great marketing, optimized time-to-market and property showings, it’s now.”
The WA market offered high yield and security for investors and good growth prospects with a relatively affordable purchase price, but investors have yet to take advantage of these conditions.
“If you’re an investor, don’t expect the typical herd mentality,” Percudani said.
“Conditions in WA – be it property values, vacancy rates, investment returns and moderating competition, combined with a strong economic backdrop – all suggest that investing in the WA’s rental market would be a good move at this time and an investment area to get into and not get out of.
“WA has followed a different COVID-19 management timeline than other states and, due to the dramatic impact of the previous mining boom, investors may be distracted by previous cycles, but fundamentals suggest a history of positive investment, rather than negative.
“It will be a much better financial decision to invest in WA compared to other states, where the markets offer lower returns and up to twice the cost of buying.”
With the rollout of vaccinations and a significant easing of social distancing restrictions, an increase in foot traffic for home openings and auctions has occurred.
“As the population cautiously adjusts, there is likely to be a shift in household spending and a slowdown in savings that might previously have been earmarked for a deposit for a house as WA is able to travel again,” Percudani said.