Afterhitting the bottom of the market during 2020, REIWAs 2021 outlook indicatesthe Western Australian property market should experience steady growth in boththe rental and sales market – something not seen since the strong conditions in2013.
REIWAPresident Damian Collins said 2020 has been an unusual year for property,however despite the lull experienced during the start of the COVID-19 pandemic,WA is showing extremely positive signs.
Perth sales market
Salesactivity in Perth at the start of the year was sitting at approximately 2,900 transactionsper month followed by an uptick where we are now seeing nearly 4,200transactions, Mr Collins said
Listingsfor sale have reached a 13-year low with just over 10,000 listings for sale onreiwa.com, putting upwards pressure on prices.
Sales activity
Agentson the ground have reported that recently it is not uncommon for sellers to bereceiving multiple offers, including being offered thousands more than theadvertised price, something which has not been seen since 2013.
Withrecord low interest rates looking like they will be around for a while, manybuyers are finding it cheaper to buy than rent. This is one of the reasons whywe can expect sales activity in 2021 to continue gaining momentum, Mr Collinssaid.
Median sale price
In2020, Perth was the lowest median house value of any capital city in Australiaand with the increase in population growth due to people returning to WA fromoverseas and interstate, this could change in 2021.
Whilehouse prices were largely stable over the last 12 months, it is expected thatprices will increase between six and 10 per cent over the next 12 months.
More sales information
If you are looking to buy or sell in 2021, make sure to view our buyer advice or seller advice to help you on your real estate journey.
Alternatively keep up-to-date on the latest sales information view ourPerth Market Snapshot graphfor a detailed breakdown of the past week.
Perth rental market
Afteran unexpected 2020, Perths rental market has reached crisis levels with thevacancy rate reducing to below one per cent due to the flow on effects ofCOVID-19.
Populationgrowth increased 1.5 per cent during the 12 months to March 2020 and with more than1,000 international arrivals expected per week, plus the domestic bordersopening, the rental market could get more competitive for renters at the startof the year before it gets any better due to the low levels of available rentalproperties, Mr Collins said.
Median rent
Thelimited stock of rentals available has resulted in an upward pressure on rents withthe median rent increasing from $350 to currently sit at $380 per week in thelast few months, which is an 8.5 per cent increase.
Wecan 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 cityto rent in across all Australian states and territories Mr Collins said.
Looking ahead
Thepositive outlook for the Perth rental market, will hopefully attract anincrease in investors looking to take advantage of the favourable marketconditions. This will help boost the available supply of rental propertiesthereby keeping rent increases to reasonable levels.
More rental information
If you’re looking to rent, make sure to check out our rental advicefor the latest WA rental information and tips to help with your rental application.
For the latest information about the emergency tenancy legislation, view our advocacy page.
Regional WA
REIWAexpects the overall market conditions to improve in regional WA during 2021 asa direct result of population growth and change in lifestyle preference due to theCOVID-19 pandemic and general market conditions.
MrCollins said we have already seen significant improvements in Karratha, PortHedland and Kalgoorlie Boulder during the latter half of 2020 with increasedrental demand and sales activity.
Vacancy rate
Increasesin certain mining areas are due to companies moving their staff closer to themining sites to live while the borders are closed. While this has put upwardpressure on the rental and sales market, other regional centres are alsoexperiencing lowered vacancy rates, limited rental stock and an increase inmedian rents, Mr Collins said.
Accordingto reiwa.com data, at the latter end of 2020, Albanys vacancy rate droppedfrom 0.9 per cent to 0.4 per cent, Bunbury was down from 3.1 per cent to 0.7per cent and Geraldton was 5.1 per cent to now sit at 1.5 per cent.
Looking forward
Whiledecreases in rental stock can be explained by higher population growth and lowinvestor activity, it will be interesting to see how working from home impacts lifestylechoices and if we see an increase in demand for regional properties in 2021 dueto people opting for an alternative lifestyle while working from home, MrCollins said.
More regional information
Learn more about how the regional market has changed over the last quarter by viewing ‘Median sale price increases in eight regional centres’.
