- House prices expected to grow 10%
- Rental prices expected to grow 10%-15%
- Some pressure on renters may lift
Perth property prices are expected to be on the up, increasing 10 per cent next year, said REIWA. The forecast follows this year’s price growth for the Western capital of some 14 per cent.
“Despite the strong price growth recorded in 2021, WA is still the most affordable state in the country for housing, with prices in most regions across the state yet to catch up to their 2014-15 peaks,” said REIWA President Damian Collins.
REIWA said sales are strong, with average weekly reported sales almost 30% up on the previous year. Average weekly reported sales figures in 2021 sit at 865, compared to 680 from 2020.
“Since the spring selling season kicked off, weekly reported sales on reiwa.com have routinely been above 1,000 per week, which demonstrates that the demand for housing in Perth is still very strong,” said Mr Collins.
Mr Collins added that the Institute anticipates sales to “hold at current healthy levels in 2022”, which will result in upward pressure on house prices over the next twelve months.
Expectations are that West Australians will continue to try and capitalise on strong price growth throughout next year, increasing listings “modestly” for 2022, however remaining below historic averages.
“Current listing levels are 11 per cent lower than they were this time last year and almost 50 per cent lower than what they were three years ago.
“The increase in new listings to market next year should be offset by the resumption of migration once interstate and international borders open.
“As more people arrive in WA, this will add to the demand for housing and keep listings below historical averages.”
Damian Collins, REIWA
Interest rates are also expected to rise in 2022, REIWA said such an occurence has the potential to slow the market next year.
“It would be unlikely to derail the market entirely though. WA has some of the most affordable housing in the country and one of the strongest economies in the world. We also have very low ‘for sale’ and ‘for rent’ stock. All of these factors point to another strong year of growth,” said Mr Collins.
Renters may receive a small reprieve next year, REIWA said the rental shortage is expected to improve slightly as new constructions are completed and investor activity grows.
“Whilst rental listings are likely to remain lower than historical averages, we do expect to see more available rentals on the market in 2022 than we saw this year,” said Mr Collins.
Rental prices are also expected to increase, REIWA estimates median rent prices to move 10 to 15 per cent up next year.
“Tenant demand will remain high in 2022, which will see rents continue to rise. Despite this, the Perth rental market is still very affordable, with WA tenants enjoying the cheapest rental market conditions in the country,” said Mr Collins.
One concern raised by REIWA were the changes to the Residential Tenancies Act 1987 (RTA) being considered by the WA Government.
“The outcome of the RTA review could have dire consequences for the state’s rental market if investors’ rights are taken away.
“The tenancy laws must remain fair for both rental providers and tenants, or we will see investors exit the WA market in large numbers, putting added pressure on the already short rental supply, and causing more harm to tenants in the long-run,” said Mr Collins.