Despite Perth’s property market having had another relatively dour year, property market forecasters are becoming excited as to the prospects of the market in 2020.
To give you an idea SQM research is forecasting Perth property median prices to increase between 3 and 7% in 2020 – the level depending on the strength of the economy.
While it’s a far cry from their predictions of a 17% rise in values in Melbourne and 16% rise in Sydney, it is nevertheless, a turnaround from how things have been in WA since the end of the mining construction boom.
The massive disparity in property prices between that of Perth and Sydney – (Perth’s median house price is less than half of Sydney’s) has led to forecasters claiming there is a distinct possibility of a substantial increase in foreign investors buying here.
Some regard the Perth property market as representing the best investment opportunity seen in Australia for many years, suggesting that as a result of the current political climate, there could be people from Hong Kong looking to Perth as a place to secure capital and a place to move to if the situation in Hong Kong escalates further.
Despite the dour year things are looking up.
So where are we at the moment?
- CoreLogic's November Home Value Index revealed that Perth's dwelling value increased 0.4% in November, the first overall rise since April 2018.
- According to the WA Real Estate Institute one in four suburbs experienced an increase in median prices.
- Perth's rental market continues to tighten and as a result, median weekly rents have risen by $5 and the vacancy rate is down to 2.4% which means investing is becoming more attractive as rental levels are likely to increase further thus giving better returns on investment.
- The Housing Industry Association recently reported housing approvals in October declined in most states, with the exception of WA that saw an increase of 11.5%.
With respect to house prices, according to REIWA’s figures the median at the end of the September quarter stood at $482,750, marginally lower than the $485,000 of the same time in 2018. Unit prices headed in the same direction: $377,500 in September 2019 compared with $396,000 in September 2018.
The November increase will not be reflected in the figures until the release of the December quarter results.
REIWA reported that as of December 1 there were 14,044 properties for sale which was 20% less than a year ago.
Rental vacancies totaled 6,022 properties – 17% less than a year ago.
With respect to property sales activity, the momentum in the top end of town – and in second level tiers has definitely improved.
This is a good indication that there is an increase in home upgrading taking place which often happens as confidence begins to rise and in anticipation of prices rising.
The traditionally busy New Year period for rental activity will give an indication of prospects to prospective investors because if rental levels tighten much further there is highly likely to be a flurry of activity from that quarter for lower priced properties.
Please note office opening times:
Our office will be open over the Christmas period to show both rental and sales properties.
It will be closed on December 25, 26, 27 and January 1 as well as the usual closure on weekends.
The office will be open all other days so please feel welcome to make contact if you require our assistance.