Western Australias strong property market conditions are expected to continue, with REIWAs 2022 outlook estimating Perth house prices will rise a further 10 per cent next year.
REIWA President Damian Collins said the WA property market was firmly in recovery, with the Institute forecasting Perth house prices to increase by 10 per cent in 2022, following approximately 14 per cent price growth in 2021.
Despite the strong price growth recorded in 2021, WA is still the most affordable state in the country for housing, with prices in most regions across the state yet to catch up to their 2014-15 peaks, Mr Collins said.
Perth sales market
Sales activity is strong in Perth, with the average weekly reported sales figure in 2021 sitting at 865 up from 680 in 2020.
And since the spring selling season kicked off, weekly reported sales on reiwa.com have routinely been above 1,000per week, which demonstrates that the demand for housing in Perth is still very strong, Mr Collins said.
We anticipate sales volumes to hold at current healthy levels in 2022, which will put upward pressure on house prices over the next 12months, Mr Collins said.
Listings for sale should increase modestly in 2022 as sellers seek to capitalise on strong price growth, however they will remain below historic averages.
“Current listing levels are 11 per cent lower thanthey were this time last year and almost 50 per cent lower than what they were three years ago, Mr Collins said.
The increase in new listings to market next year should be offset by the resumption of migration once interstate and internationalborders open. As more people arrive in WA, this will add to the demand for housing and keep listings below historical averages.”
The outlook for 2022 is positive, however interest rate increases loom as a possible deterrent.
Interestrate rises have the potential to slow the market in 2022. Whilst most people are aware that interest rate rises will occur at some stage, if there are multiple interest rate rises too close together, this could reduce market activity and slow projectedgrowth, Mr Collins said.
It would be unlikely to derail the market entirely though. WA has some of the most affordable housing in the country and one of the strongest economies in the world. We also have very low for sale and for rentstock. All of these factors point to another strong year of growth.
Perth rental market
REIWA anticipates Perths rental shortage to improve slightly next year as new constructions are completed and investor activity grows.
Whilst rental listings are likely to remain lower than historical averages, we do expect to see more availablerentals on the market in 2022 than we saw this year, Mr Collins said.
Weve seen investor finance levels increase in WA during 2021, which should result in more properties being available to rent in 2022. Additionally, as construction projectsare completed and people move into their new homes, this will free up some of the rental stock that is currently occupied.
Median rent prices are estimated to increase between 10 and 15 per cent during 2022, which will attract investors.
Tenant demand will remain high in 2022, which will see rents continue to rise. Despite this, the Perth rental market is still very affordable, with WA tenants enjoying the cheapest rental market conditions in the country, Mr Collins said.