Stockland WA General Manager Communities and President of the Urban Development Institute of Australia (UDIA) for WA, Col Dutton talks about the Perth property market.
After a questionable start to last year, Perth's housing market returned hotter than ever, with existing and off-the-plan properties both selling at an unprecedented rate through to this very day. However, like with anything that's in demand, there's a price to pay to securing hot property.
Data recently released by REIWA and CoreLogic’s Home Value Index revealed Perth’s median property prices are steadily rising by 3.8 percent for the rolling quarter to January, with sales activity also increasing by 25 percent during 2020, compared to 2019.
With house sales increasing at an expedited pace, the question remains: is now the best time to buy? Or should you wait for the market to steady?
For those considering the latter, you might be waiting a while, as Perth’s properties are tipped to continue to grow in value and sell at record speeds. Stockland’s H1 report revealed that in 2020 we had our strongest sales results in four years. In fact, our Calleya community is on track to sell out one year ahead of schedule.
So, what’s driving Western Australians to invest in property at this time?
Firstly, there’s been a reduction in the number of houses for sale on the market, with listings dropping 34 percent during 2020, according to REIWA’s latest market update. This was undeniably due to the social and economic impact of the COVID-19 pandemic, and the great uncertainty that came with it, making it difficult for would-be sellers to commit to a listing.
At the same time, we’re seeing more people flock to and settle in WA. According to the latest ABS data, Greater Perth welcomed 1,400 new people in the September 2020 quarter alone. We can only assume many of these new arrivals were in need of a home to live in, and with the rental market depleting, for many the only option to secure accommodation is to buy.
The second layer to the issue of home buying in our current market is the extremely attractive interest rates. Set at a national level, interest rates are giving home buyers the opportunity to lock in long-term mortgages at record-low cost. Paired with favourable grants and incentives — such as the stamp duty rebate and HomeBuilder initiative — buyers have never been so incentivised to lock in a home.
Finally, and perhaps most importantly, there is increased competition when it comes to signing and settling on property. It’s no longer just Perthites getting on WA’s property ladder. With our city’s property price boom now being recognised across the country, residents now also face additional competition from eastern states investors — who’re buying up big to capitalise on the attractive returns found in our current rental market.
In the last few weeks in particular, we’ve seen WA houses in excess of $600,000 sell before the buyer has even walked through the door. Put simply, buyers are offering everything they can upfront to avoid the queues and competition of a home open.
Despite the heat of the market, Perth property prices continue to show return on value. New communities such as Amberton Beach are providing residents with extremely attractive lifestyles — sun, sand and community — all at an affordable price point.
In response to the strong demand associated with the lowest level of available stock since 2014, a rising established market, and the tightest rental market in the country, we expect WA homes to continue to remain hot property throughout the second half of 2021.
So, for those wanting to purchase a new home, don’t let the rising prices deter you. Determine the value based on your wants and needs and use this to guide your purchase decision.