April 15, 2021 0

Western Australian property prices are expected to soar by 15 per cent in 2021, REIWA said on Monday, following strong price growth experienced in the first three months of this year.

But working in WA’s favour is the fact that it still remains the most affordable state in the country when comparing income to median house prices.

In fact, the current Perth median house sale price is $495,000, which is down from the peak of $550,000 in 2014.

As such, REIWA president Damian Collins believes buyer demand is set to increase further.

“CoreLogic’s Perth home value index shows prices have grown 5 per cent in the first three months of 2021. In November 2020, REIWA forecast prices in WA would increase as much as 10 per cent in 2021; however, based on what we have seen in the first quarter of 2021, we now anticipate growth of 15 per cent by the end of the year,” Mr Collins said.

“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,” he advised.

Noting a fundamental imbalance between supply and demand in the sales market, Mr Collins explained that buyers are being pushed to act quickly and in competition with one another, which is the chief driver of house prices.

“When you factor all 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,” Mr Collins said. 

Earlier this month, REIWA reported that properties in Perth are selling the quickest they had in 15 years. In the span of 12 months, Perth’s median selling time dropped from 43 days in March 2020 to just 17 days in March 2021.

At the time, Mr Collins characterised the market as a “seller’s market”, with buyers said to be under increasing pressure.

Source: Smart Property Investment


April 12, 2021 0

A new survey has shown that home market sentiment is strongest amongst property investors in Perth and Brisbane.

Results from a survey by Western Australian-based property investment consultancy, Momentum Wealth show respondents from Queensland and WA are increasingly bullish about the prospects of their local markets over the next 12-months.

Momentum Wealth General Manager Jennifer Wakeman said the positive local sentiment amongst Perth and Brisbane investors was driven by a number of factors.

“Perth and Brisbane share similar growth characteristics with both markets benefitting from tight rental and sales markets and an uptick in mining activity,” Wakeman said.

“Population resilience throughout the pandemic has also benefitted Perth and Brisbane, and this is placing further pressure on these tight property markets.”

76 per cent of survey respondents from Queensland selected the Brisbane market as the best place to invest this year.

Local sentiment in Western Australia was even higher with 78 per cent of WA-based residents believing Perth to be the location with the most upside.

Investors eye WA upside

Perth was also identified by investors as the best capital city market in which to purchase an investment property, with 48 per cent of total respondents selecting the Western capital as their preferred investment location over the next 12-months.

This marks an 11 per cent increase in investor confidence in the Perth market compared with results from the last survey, and Wakeman says this reflects the strong growth that the Perth market has experienced in recent months.

“After several years of downturn, WA investors are now seeing sustained growth, and confidence in the long-term prospects of the market is reflected in the high number of local investors who view Perth as the best place to invest,” she said.

“Western Australia has seen a resurgence in mining activity which, coupled with the State’s effective response to the COVID-19 pandemic, has helped buoy the economy and provided a boost to investor confidence.”

Perth properties are now selling at their fastest pace in 15 years, according to Real Estate Institute of WA, while the median house sale price sits at $495,000 in March 2021, up from $480,000 in March 2020.

Confidence in Sydney and Melbourne falls

Investor confidence in Melbourne has fallen by seven per cent, with only 10 per cent of investors surveyed viewing the city as the best location to invest in 2021, according to the survey.

Meanwhile, confidence in Sydney remained low with only eight per cent of responders viewing it as the capital city market with the greatest potential.

Wakeman commented that international population growth has previously acted as a key source of demand for both Sydney and Melbourne.

“The Sydney and Melbourne markets have recently benefitted from high levels of overseas migration, however, this exposed them to greater downside risk when international borders closed, leaving them more vulnerable to an influx in supply compared to markets like Perth where these levels of demand have been much lower,” she said.

“Despite the weakened inner-city markets, both Sydney and Melbourne have weathered the impacts of the pandemic better than many experts predicted, largely as a result of increased owner-occupier activity, especially at the top end of the market.”

“However, investors remain largely absent from these two markets as they turn attention to cities like Perth and Brisbane which are offering much tighter rental markets as well as greater affordability,” she concluded.

Source: The Market Herald