15th December 2021
Article from our Directors Di Addenbrooke & Zac Addenbrooke, with additional information sourced from REIWA
Western Australia’s strong property market conditions are expected to continue, with REIWA’s 2022 outlook estimating Perth house prices will rise a further 10 per cent next year.
REIWA President Damian Collins said the WA property market was firmly in recovery, with the Institute forecasting Perth house prices to increase by 10 per cent in 2022, following approximately 14 per cent price growth in 2021.
“Despite the strong price growth recorded in 2021, WA is still the most affordable state in the country for housing, with prices in most regions across the state yet to catch up to their 2014-15 peaks,” Mr Collins said.
PERTH SALES MARKET
The average weekly reported sales figure in 2021 sat at 865 – up from 680 in 2020.
“And since the spring selling season kicked off, weekly reported sales on reiwa.com have routinely been above 1,000 per week, which demonstrates that the demand is still strong.
Here at Pulse Property Group, we anticipate sales volumes to at least hold at current healthy levels in 2022, which will put upward pressure on house prices over the next 12 months. Our experienced sales teams are achieving record sales prices for our clients, due to our unique selling resources and our exceptional market knowledge.
We also think listings for sale should increase modestly in 2022 as sellers seek to capitalise on strong price growth, however, they will remain below historic averages.
Current listing levels are 11 per cent lower than they were this time last year and almost 50 per cent lower than what they were three years ago.
The increase in new listings to market next year should be offset by the resumption of migration once interstate and international borders open. As more people arrive in WA, this will add to the demand for housing and keep listings below historical averages.
Interest rate increases loom and may be a small deterrent to some buyers. As historically interest rate rises have been seen to slow the market moderately. If there are multiple interest rate rises too close together, this could reduce market activity and slow projected growth.
WA is still the most affordable market, and with one of the strongest economies in the world, we don’t expect to see a negative impact.
PERTH RENTAL MARKET
We anticipate Perth’s rental shortage to improve slightly next year as new constructions are completed and investor activity grows. Rental listings are likely to remain lower than historical averages although we should see more available rentals on the market in 2022.
Overall, the WA property market has seen investor finance levels increase during 2021, which should result in more properties being available to rent in 2022. Many experts within the industry agree, that as construction projects are completed and people move into their new homes, this will free up some of the rental stock that is currently occupied.
Median rent prices are estimated to increase between 10 and 15 per cent during 2022, which will attract investors. According to REIWA.
We expect Tenant demand to remain high in 2022, which will see rents continue to rise. Despite this, the Perth rental market is still very affordable, with WA tenants enjoying the cheapest rental market conditions in the country.
Mr Collins states that a significant threat to the WA rental market in 2022 and beyond is the major changes being considered by the WA Government to the Residential Tenancies Act 1987 (RTA).
“The outcome of the RTA review could have dire consequences for the state’s rental market if investors’ rights are taken away,” Mr Collins said.
“The tenancy laws must remain fair for both rental providers and tenants, or we will see investors exit the WA market in large numbers, putting added pressure on the already short rental supply, and causing more harm to tenants in the long run.”
Market conditions across regional WA are expected to remain strong in 2022, with lifestyle predicted to be a key growth driver.
In 2022 we anticipate lifestyle to be a driving factor behind where people choose to live, especially if there are local employment opportunities in regional areas. The strong demand should continue as WA’s population starts to grow again.
HERE TO HELP
Our team at Pulse Property Group are here to assist with all your property needs.
Whether you’re seeking advice, thinking of selling or upsizing or downsizing, looking to invest or for someone to manage your property investment(s), our professional and knowledgeable team are here.
Contact us on the details below or visit us at one of our offices for a confidential chat.
08 9259 6999
0437 414 178
Suite 7/19 Tribute Street W, Shelley (next door to The Tribute coffee + kitchen)
Suite 1/776 Canning Highway, Applecross (just down the road from the Applecross Village)