Perth’s 10 biggest property hotspots for 2021 will include several underpriced coastal suburbs and rezoned areas attracting developer swarms, a local expert says.
Though West Australian property values remain almost 20 per cent below 2014 levels, some economists were forecasting rapid growth thanks to low interest rates, housing stock shortages and people returning to the state, Trent Fleskens told Nine News Perth.
The managing director of Strategic Property Group and host of The Perth Property Show podcast predicted Riverton as the top hotspot, with the perennially sought-after Rossmoyne Senior High School and recent rezonings to higher housing density attracting developers.
Second was Willagee, a gentrifying suburb in which prices had already increased 10 per cent on like-for-like stock in the past year.
Third was Willetton, which also had rezoned areas and the drawcard of a quality high school.
Fourth, Nedlands, also had recent rezonings resulting in new developments.
Fifth was Morley, which Mr Fleskens said always did well in an upswing, with the announced Morley train stationplus the Bayswater station refurbishment to improve the suburb’s offering further.
Next was coastal Kallaroo, which Mr Fleskens said was underpriced, with rezonings adding stock.
Seventh was Padbury, which he considered underpriced, had recently upzoned areas, and was attracting buyers priced out of Duncraig and Warwick.
Rezonings were also pulling developers into St James, next up, and price rises in neighbouring East Victoria Park and East Victoria Park sending more buyers. Mr Fleskens said the Albany Highway cafe and retail strip was one of WA’s strongest.
Rounding off his list were two more coastal suburbs: Trigg, which he said lost significant value in the downturn with big houses now being snapped up, and North Beach, a gentrifying suburb with subdivision potential.
CoreLogic’s latest home value index, just released, showed Perth’s overall dwelling market (units and houses) grew 1.9 per cent in 2020, the rental market is doing exceptionally well and its unit market is outperforming the national average.
From a long-term perspective Perth rents are still much lower than their 2013 peak, but Perth rental growth was strongest amongst the nation’s capitals for 2020 at around 10 per cent.
Research director Tim Lawless said in a statement Perth had recorded below average investor activity in recent years, leading to a rentals shortage, and more recently, stronger interstate migration had increased demand.
Mr Lawless also said low investor demand for units – as well as high supply in some areas and a transition of demand towards houses – was also why unit prices underperformed compared to houses throughout 2020 across the country.
Perth unit prices, growing 1.3 per cent to a median $365,037, were slower than Perth house values, which grew 1.9 per cent to a median $490,810. But they fared better than the national unit price growth average of 0.2 per cent. Nationally, the index showed Australia’s housing market finishing the year strongly.
A 1 per cent rise in December was the third consecutive month of rises after a COVID-related drop of 2.1 per cent from April to September, and home sales recovered to finish the year with almost 8 per cent more than a year ago despite a 40 per cent drop through March and April.
Mr Lawless said the rebound was thanks to the government’s “rapid and substantial” response; record-low interest rates played a key role, along with a rise in consumer confidence as lockdowns were lifted and economic forecasts proved pessimistic.
Containing the spread had been critical to economic and housing market resilience, but downside risks remained. “New restrictions associated with a COVID outbreak would set back the economic recovery,” he said.