Investors are expected to lead WA’s housing recovery on the back of increased rental demand and a surge in buyer activity in many suburbs.
At the Property Council of Australia’s Outlook 2020, REA Group chief economist Nerida Conisbee said there had been a noticeable increase in inquiry from investors in WA.
“On realestate.com.au and we are tracking a lot of activity from people who are investors,” she said. “The differential is that it’s a lot of activity on houses, but not as much on units. In fact, there’s been a 40-50 per cent increase in housing interest.”
The positive outlook was supported by a panel of industry experts that included Dorado Property’s Tim Moore, Finbar managing director Darren Pateman, Coxon Group director Sarah Coxon and AMP Capital’s Scott Nugent.
Pulse Property Group director Di Addenbrooke said there was no doubt that a combination of affordability, improved rental conditions and positive future indicators were turning investors’ heads.
“Improved activity in the mining sector, population growth and increased infrastructure spending are all driving higher levels of demand,” she said.
A national survey by property investment consultancy Momentum Wealth this month found more than a third of investors surveyed ranked Perth as the best place to invest in the next 12 months. And more than 60 per cent ranked Perth as the capital with the highest growth potential over the next three years.
Property analyst CoreLogic reported that Perth dwelling values posted their first rise over a rolling quarter (+0.4%) since a brief period of growth in May 2018.
Domain’s February Property Price Forecast predicts house and unit prices in Perth are both set to grow by 5 per cent this year, then by 3 to 5 per cent in 2021.
And according to the Australian Bureau of Statistics, the value of home loans in WA rose by 3.8 per cent in December, bringing the average mortgage size in the State to about $410,000, well below the national average of $497,000.
Housing Industry Association economist Angela Lillicrap said the positive lending data was consistent with other leading indicators, including new home sales and building approvals, showing that the housing market reached a turning point mid-way through 2019.
“House price growth and lower interest rates are supporting market confidence leading to an increase in lending to owner-occupiers for the purchase of a new home,” Ms Lillicrap told Business News. “This confirms our expectations that the market reached a new, relatively shallow trough, in 2019.”
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