- REA Group's recent report reveals Perth's property market booming
- Mining sector and government stimulus have driven strong home buyer activity
- Perth recorded rental increases in almost every suburb by the end of 2020
According to REA Group’s Property Outlook Report 2021, the WA economy and Perth’s property market have really accelerated despite the pandemic.
The report attributes such better conditions of the economy to the mining sector, particularly iron ore, which had a great year due to China’s infrastructure program and our main iron ore competitor, Brazil suffering production problems.
Strong home buyer activity driven by government stimulus and record low-interest rates led to big jumps in new home construction, a sector of the market which had been challenged for a long time.
Despite a booming housing market, the recovery is not uniform. Perth suburbs featured both the strongest and weakest median house price growth, with Kelmscott taking the number one spot (39% rise) and Port Hedland coming next on the list (26% rise). However, overall, WA did not feature in any of the largest declining suburbs.
Unlike Melbourne and Sydney, which are suffering weak rental markets driven by low unit demand, Perth was seeing rental increases in almost every suburb by the end of 2020.
Mandurah in particular recorded the strongest median rent increase of over 7%, followed by the South and North West recording around 6% and 5% respectively.
Over the past 12 months, Perth’s premium market was the strongest performer.
Like the rest of Australia, the bettering conditions for Perth’s housing market will look to continue, assuming trends in growing confidence, the arrival of a vaccine, and very cheap financing due to the Reserve Bank of Australia’s exceptionally easy stance on monetary policy.
Nerida Conisbee, REA Chief Economist and author of the report said many of these themes and momentum we saw will continue in 2021.
“Perth is seeing the best conditions since the last mining boom with the rental market particularly hot. Great conditions in first home buyer suburbs will ease but the rest of the city will continue to do well.”
The full report is called REA Insights: Property Outlook Report – Residential property post-pandemic (February 2021).