As active players in the Perth property market, we have seen multiple signs of recovery in the latter half of 2018. We aren’t the only ones who have noticed with other credible sources including Premier Mark McGowan and Real Estate Institute of WA President Damian Collins both speaking out about the direction the Perth property market is headed.
Let’s start with some good news for Investors. Over 2018, Perth’s best quality was its rental market, said REIWA president Damian Collins. Perth’s successful rental market is expected to keep its momentum going through 2019 due to steady population growth and a slowdown in new building construction, according to REIWA data.
Mr Collins said that during 2018, the steady median rent of $350 per week, increased leasing activity, and decline in listings and vacancy rates all contributed to Perth’s rental success.
“With population growth in WA expected to remain stable and new dwelling commencements slowing, available rental stock should continue to decline. This should see competition amongst tenants increase, putting further downward pressure on the vacancy rate, which recently dropped below four per cent for the first time in four years,” Mr Collins said.
Mr Collins also noted that Perth’s median rent price has remained at $350 per week for 19 consecutive months, which is the longest period of consistent rents in Perth since REIWA began collecting rental data in 2001.
“If listings continue to decline and leasing volumes remain healthy, we should see the overall median rent price increase in 2019 for the first time since September 2014,” Mr Collins said.
Moving onto the sales market, Mr Collins said “While we expect sales activity in 2019 to largely reflect what we’ve seen this year, there is a possibility that rising consumer confidence levels, coupled with improved housing affordability, could translate into increased sales volumes in 2019. If weekly sales remain at current levels or better, Perth’s median house price could improve during the next 12 months.”
According to The Sunday Times, the State’s domestic economy expanded 1.1% in 2017-18, a considerable turnaround given the 7.1% drop during 2016-17 after four consecutive years of decline.
More good news? WA could be set to reclaim it’s AAA credit rating due to the $4.7 billion GST reform package. Premier Mark McGowan tipped a turnaround in the property market stating “It is actually a good time to buy a house, I would encourage people. Prices are low yet economic activity is picking up and so that will inevitably be followed by demand for housing.”
All signs point towards an improved Perth property market in 2019. The year is drawing to an end and Christmas is on the horizon however we are yet to see any signs of the market slowing down with an increase in available properties for sale and a significant decline in our rental vacancy rate which now sits at just 2.4%.
*All figures are accurate at the time of publication. Sources include The Sunday Times, The West Australian, REIWA and Smart Property Investment