The Reserve Bank has cut interest rates to a record low, boosting buyer confidence amid the coronavirus outbreak.
Pulse Property Group director Di Addenbrooke said the RBA decision consolidated the optimism that had gained momentum in the WA market since the New Year.
Official interest rates were cut by a quarter of a percentage point to just 0.5 per cent in a bid to protect the Australian economy from the financial coronavirus fallout.
“Both vendors and buyers are watching the virus situation closely – I think it’s natural that people will pause,” Di said. “But the signs are still good and there’s been no major disruption to the Perth market. “I think people see bricks and mortar as a more stable investment than shares when there’s global uncertainty.”
She said Pulse Property Group had a massive long weekend of home opens from Riverton to Ardross and everywhere in between. “The interest was genuine and prospective buyers seemed confident,” Di said. “In recent days we’ve had offers on homes such as 95 Corinthian Road West in Shelley that had only been on the market 12 days.”
The Real Estate Institute of WA figures show that the rental vacancy rate has plummeted to 2.2 per cent, prompting a bidding war on some properties.
REIWA president Damian Collins said rentals would rise up to six per cent this year – always a positive economic indicator and sign property prices will also strengthen. Mr Collins predicted house prices would increase by between three and four per cent, despite the coronavirus. “Investors haven’t been around for quite some time, but we expect this will help bring them back,” he said.
CoreLogic also flagged further evidence that the long-running downturn was over for Perth, reporting that dwelling values had increased again in February, marking four consecutive months where values had avoided a fall.
CoreLogic researcher Tim Lawless said this was a trend not seen since the market peaked in mid-2014. “Although Perth values are now trending higher, the recovery period is likely to be a long one with Perth housing values remaining 21 per cent below their peak,” he said.
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