Where to next for the Perth Property Market?
For some time now we have been reporting a distinct lack of Investor activity in the Perth market despite a significant improvement in housing conditions, record low vacancy rates and rental yields generally supporting positive cashflow. In fact, we are seeing long term Investors selling down their properties in droves. Could it be that the generally poor performance of Perth’s property market over the past decade has spooked a generation of Investors?
Whilst it is perhaps not surprising that Investors are remaining cautious amidst our closed border scenario, I really don’t understand why so many existing Investors are choosing to quit the market as conditions improve. Across all property management offices, we are seeing significant shrinkage due to Investors either selling their investment or moving back in. Those that sell are selling to Owner Occupiers, further exacerbating the tight rental market forcing tenants to find new homes. These Owner Occupiers are very active across all sectors and the market is experiencing good growth albeit far more subdued than the East Coast, thus far.
So where do we see the Perth market heading? Is the growth spike done and tapering already or is it just the beginning? We believe the answer is backed by the fundamentals of supply and demand and what will occur over the next 1 – 3 years. Presently we have a very low supply of homes available for rent and for sale and whilst there is considerable construction of free-standing homes under way, thanks to the government stimulus, will this provide the necessary housing required to support the population growth required to fill the over 55,000 job vacancies in Western Australia right now. I don’t know of a company not looking for a new staff member or ten at present.
As the rest of Australia prepares to open up, international migration will begin in earnest with the federal government looking to replace the lack of population growth over the past 2 years. Yesterday, Domain released its September Quarter 2021 House Price Report showing a combined capital city median house price of an eye watering $994,579 completely skewed by Sydney at $1,499,126 and Melbourne at $1,037,923. Perth remained the most affordable Capital City with a median house price of $598,601. Yes, less than half of Sydney! Now might be a good time to remind you all of a time not so long ago when Sydney’s median house price was $520,000 and Perth’s was $500,000.
With the tightest job market in the country, over 55,000 job vacancies, the strongest state economy, the most affordable property and one of the cleanest, most free from Covid cities on the planet I’ll let you decide on where International Migrants might choose to head when our borders finally open.
Personally, I’m backing Perth. I’m buying property rather than selling, I’m double vaccinated and preparing for a period of sustained and exciting growth.
If you would like to discuss your personal situation, feel free to contact me directly on
Kind regards,