27 November 2020
After
hitting the bottom of the market during 2020, REIWA’s 2021 outlook indicates
the Western Australian property market should experience steady growth in both
the rental and sales market - something not seen since the strong conditions in
2013.
REIWA
President 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
“Sales
activity in Perth at the start of the year was sitting at approximately 2,900 transactions
per month followed by an uptick where we are now seeing nearly 4,200
transactions,” Mr Collins said
“Listings
for sale have reached a 13-year low with just over 10,000 listings for sale on
reiwa.com, putting upwards pressure on prices.”
Sales activity
Agents
on the ground have reported that recently it is not uncommon for sellers to be
receiving multiple offers, including being offered thousands more than the
advertised price, something which has not been seen since 2013.
“With
record low interest rates looking like they will be around for a while, many
buyers are finding it cheaper to buy than rent. This is one of the reasons why
we can expect sales activity in 2021 to continue gaining momentum,” Mr Collins
said.
Median sale price
“In
2020, Perth was the lowest median house value of any capital city in Australia
and with the increase in population growth due to people returning to WA from
overseas and interstate, this could change in 2021.
“While
house prices were largely stable over the last 12 months, it is expected that
prices 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 our Perth Market Snapshot graph for a detailed breakdown of the past week.
Perth rental market
After
an unexpected 2020, Perth’s rental market has reached crisis levels with the
vacancy rate reducing to below one per cent due to the flow on effects of
COVID-19.
“Population
growth increased 1.5 per cent during the 12 months to March 2020 and with more than
1,000 international arrivals expected per week, plus the domestic borders
opening, the rental market could get more competitive for renters at the start
of the year before it gets any better due to the low levels of available rental
properties,” Mr Collins said.
Median rent
The
limited stock of rentals available has resulted in an upward pressure on rents with
the median rent increasing from $350 to currently sit at $380 per week in the
last few months, which is an 8.5 per cent increase.
“We
can 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 city
to rent in across all Australian states and territories” Mr Collins said.
Looking ahead
The
positive outlook for the Perth rental market, will hopefully attract an
increase in investors looking to take advantage of the favourable market
conditions. This will help boost the available supply of rental properties
thereby keeping rent increases to reasonable levels.
More rental information
If you're looking to rent, make sure to check out our rental advice for 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
REIWA
expects the overall market conditions to improve in regional WA during 2021 as
a direct result of population growth and change in lifestyle preference due to the
COVID-19 pandemic and general market conditions.
Mr
Collins said we have already seen significant improvements in Karratha, Port
Hedland and Kalgoorlie Boulder during the latter half of 2020 with increased
rental demand and sales activity.
Vacancy rate
“Increases
in certain mining areas are due to companies moving their staff closer to the
mining sites to live while the borders are closed. While this has put upward
pressure on the rental and sales market, other regional centres are also
experiencing lowered vacancy rates, limited rental stock and an increase in
median rents,” Mr Collins said.
According
to reiwa.com data, at the latter end of 2020, Albany’s vacancy rate dropped
from 0.9 per cent to 0.4 per cent, Bunbury was down from 3.1 per cent to 0.7
per cent and Geraldton was 5.1 per cent to now sit at 1.5 per cent.
Looking forward
“While
decreases in rental stock can be explained by higher population growth and low
investor activity, it will be interesting to see how working from home impacts lifestyle
choices and if we see an increase in demand for regional properties in 2021 due
to people opting for an alternative lifestyle while working from home,” Mr
Collins 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'.