WA’s property price growth revised upward
REIWA has revised its forecast for Western Australia’s property price growth, following a strong first quarter.
Western Australian property prices are expected to soar by 15 per cent in 2021, REIWA said on Monday, following strong price growth experienced in the first three months of this year.
But working in WA’s favour is the fact that it still remains the most affordable state in the country when comparing income to median house prices.
In fact, the current Perth median house sale price is $495,000, which is down from the peak of $550,000 in 2014.
As such, REIWA president Damian Collins believes buyer demand is set to increase further.
“CoreLogic’s Perth home value index shows prices have grown 5 per cent in the first three months of 2021. In November 2020, REIWA forecast prices in WA would increase as much as 10 per cent in 2021; however, based on what we have seen in the first quarter of 2021, we now anticipate growth of 15 per cent by the end of the year,” Mr Collins said.
“We hit the bottom of the market around June last year following the COVID-19 lockdown, and since then, consumer confidence has returned. Buyers who were waiting for the bottom to hit are now eager to get into the market and take advantage of the record-low interest rates,” he advised.
Noting a fundamental imbalance between supply and demand in the sales market, Mr Collins explained that buyers are being pushed to act quickly and in competition with one another, which is the chief driver of house prices.
“When you factor all these components in, it is a perfect storm for higher-than-expected house price growth this year. We need to get more homes and apartments built. Until we see supply catch up with demand, we will see prices continue to rise,” Mr Collins said.
Earlier this month, REIWA reported that properties in Perth are selling the quickest they had in 15 years. In the span of 12 months, Perth’s median selling time dropped from 43 days in March 2020 to just 17 days in March 2021.
At the time, Mr Collins characterised the market as a “seller’s market”, with buyers said to be under increasing pressure.
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