- After 5 years in the doldrums, double digit growth expected
- Estimates of price increases vary, from +5% to +12% in 2021
- Strong economic fundamentals in WA
- Low interest rates look set to remain
- Zero virus community transmission in 9 months
The property markets of Western Australia boomed in the early to mid 2000s, carried along by a mining construction boom that nullified the effects of the global financial crisis.
Since then however, there has been little to cheer about Perth’s residential market, with sales activity sitting at about half the levels of the boom times. Median property prices have been edging downwards over the past five years, and for the past three, WA has been the most affordable state for housing, according to REIA’s Affordability Report (September 2020).
Every time someone has seemingly predicted the bottom of the market, the market has trundled along the bottom for a little while longer.
Now, however, all experts seem to agree that the Perth market is as well placed as ever as it moves into the 2021. Agents are busy, boom times seem to be back and strong interest is being recorded across the metro area.
The latest ‘Perth Market Snapshot’ from REIWA (week ending 24 January 2021) shows there are 8,310 properties on the market, which is 34% less than a year ago.
Domain reported that Perth house prices would likely “beat all other Australian cities” this year, with the best performing market “in seven years.” REIWA President Damian Collins had estimated growth to be towards the upper end of +6% to +10%.
The ANZ was quoted as suggesting +12% as the likely growth for Perth property prices in 2021, with Sydney and Melbourne rising +2% by comparison.
Bankwest Curtin Economic Centre director Professor Alan Duncan was quoted as saying the Perth market has “turned the corner” with the “volume of sales up 45% on the same time last year.”
Meanwhile, over on the rental market things are tight, with vacancy rates down to 0.8%, a 40-year low, according to REIWA, the 25th month in a row where the rate had been below 3%.
Rental prices already on the move. The latest Domain report showed a 13.5% increase in rents over 2020.
As other States and regions are also predicting great years in property for 2021, with possible repercussions for government policy, it looks set to be an interesting year in real estate.