You’ve heard it all by now; the ‘green shoots’ conversation has been regurgitated for several years following the premature prediction by industry experts of Perth’s property market recovery.
In recent months, a number of key indicators have begun to show positive trends. Whilst it is still too early to say the market is re-correcting, data from the last quarter is providing signs of encouraging alignment in the marketplace.
In the second part of 2019, we experienced a promising series of events; historically low interest rates, improving population growth, increased investor activity and the next generation of first home buyers began to enter the market thanks to improved housing affordability.
Sales stock levels decreased from 17,000 to 14,000 and remain tight, sitting roughly 14% lower than the previous year, with the flow of fresh stock to market the lowest it’s been since 2012. Buyer demand is now in line with new stock coming to market in some but not all Perth suburbs.
Rental activity improved incrementally throughout 2019; rents stabilised, we saw a modest improvement to leasing activity levels, and the average vacancy rate plummeted to the December average of 2.3 per cent. Perth’s rental growth is now the strongest of all capital cities, with the exception of Hobart due to particular circumstances.
As we head into 2020, industry experts such as REIWA confirm a positive outlook is indicated for the Western Australian sales and rental markets. This prediction is further reinforced with the Western Australian mid-year budget review revealing WA’s economy is expected to grow by three per cent in 2019-20*. From our perspective, whilst we all hope for a rapid recovery this is not likely, but rather a progressive positive consolidation of the market through 2020 and into 2021.
As there are strong signs that we may be at the bottom of the market, we recommend our clients take advantage of the market’s current position and hold onto their current residential investment properties and to consider acquiring property to add to their portfolio.
If you would like advice on the state of the investor market and how this relates to you, contact one of Realmark’s Residential Agency Directors, Scott Fletcher on 0412 181 122 to discuss the best options at this time.
Alternatively, to take full advantage of the historically low interest rates contact Nick Constantine of Capita Finance on 0418 919 203 or at nconstantine@capitafinance.com.au. Nick can provide a no-obligation review of your current loans and your capacity to leverage equity and buy at this advantageous time in the market.
Sources:
CoreLogic
New year, new market: positive signs expected for WA
REIWA Snapshot Week Ending 1 December 2019
2019-20 Mid-year Review McGowan Labor Government