Perth property plunge reversed, experts predict a return to the boom days

November 19, 2020


Perth property plunge reversed, experts predict a return to the boom days

November 19, 2020

Perth is being tipped for the nation’s biggest property boom just months after dire warnings of economic collapse during the coronavirus lockdown.

In a new report titled Housing: a strong 2021 published by ANZ on Monday, economists estimated Perth house prices would grow by 12 per cent next year, ahead of Brisbane and Hobart – something WA’s capital hadn’t experienced since the mining boom of 2010.

The upwards trend was also echoed by property analyst Gavin Hegney, who said the opening of WA’s border would push prices up over the next six months.

“They could easily rise between 10-15 per cent in the short term,” he said.

Mr Hegney believed houses valued between $500,000 to $1.5 million near the city, where demand exceeded supply currently, would increase in value the most.

“People want houses, they’re valuing a backyard at the moment,” he said.

Real Estate Institute of WA president Damian Collins said he had reports from agents that sellers were receiving up to seven offers and offering thousands more than the price advertised. He hadn’t seen this since 2013.

“It’s definitely a recovering market and in some sectors there is FOMO (fear of missing out) shown by some of the prices people are offering,” he said.

“People see that the bottom of the cycle has come and want to get in now before it moves.”

The price increase forecast by ANZ’s report would add $47,500 to Perth median house prices of $475,000, and $37,000 to the median unit price of $370,000.

“House prices are turning higher, helped by lower interest rates, substantial government stimulus and a bounce in confidence as the second wave of the pandemic comes under control,” the report said.

“These factors seem to be offsetting weak fundamentals of high unemployment, very low population growth and a fractured rental market.”

Real estate agent Richard Clucas told Nine News Perth the number of daily buying inquiries he received had doubled in the last few months.

“There is increased demand, buyers are wanting the heads up before they actually go to market,” he said.

ANZ economist Adelaide Timbrell said earlier warnings of a property plunge had dramatically changed.

“We actually started to see a recovery a lot earlier than expected, surprisingly low interest rates particularly in fixed mortgage rates has been a really key part of this,” she said.

Perth properties were also dropping from an average 55 days on market to just 28.

Homes in Subiaco, Kingsley, Rivervale and Darch were selling in less than a fortnight on average, with Mount Hawthorn, Swan View, Beechboro and Coolbellup not far behind.

WA’s peak real estate institute REIWA has labelled the forecast as “fairly optimistic and bullish”, with Mr Collins saying a price increase of five per cent was more realistic.

“We’ve got a shortage of stock, we’ve got very strong demand,” he said.

“The economy is going well with the mining sector performing particularly strongly, there’s no doubt Perth property prices are on the rise.”

Perth’s median property price is lower now than it was a decade ago, at $495,000.

It gradually ticked upwards to peak at $545,000 in 2014 but has been falling ever since to $475,000 last month.

Source: watoday.com.au