Wallowing in the property market doldrums for the last 10 years, Perth has suddenly shot back into the spotlight with some of the country’s strongest price growth and fastest-rising rents.
Last year, it was the lowest-ranked Australian city in Knight Frank’s Prime International Residential Index, with the annual price growth of luxury homes a sluggish 0.9 per cent.
Now, it’s the top city, at 3.6 per cent, compared with the Gold Coast’s 3.2 per cent, Sydney’s 1.1 per cent and Melbourne’s 0.9 per cent.
“When you look at the Perth market in 2020, it wasn’t as impacted as the others by the pandemic; it enjoyed a recovering resources sector, resilient commodity prices, an improving economy and a growing population,” said Michelle Ciesielski, Knight Frank head of residential research.
“COVID-19 made a lot of people re-evaluate how they want to live, and we’ve seen many people decide to relocate to more lifestyle cities, like Perth, Brisbane and the Gold Coast. Eighteen months ago, we saw a lot of ads for company decision-makers to head over to Perth from multiple cities, and many will stay, and we’re expecting another 3 per cent growth this year.”
That flood of people from the resources industry, support businesses and financial services helped squeeze the rental vacancy rate from its old 7.7 per cent to less than 1 per cent today.
Perth property in most price ranges looks currently undervalued, with the rebound being felt across the luxury and mainstream markets.
Recent research by the Real Estate Institute of Western Australia (REIWA) also found that the current vacancy rate of 0.8 per cent is a 40-year low.
“Usually, in that kind of situation, you’d expect investor finance of about $1 billion a month,” said REIWA president Damian Collins.
“But right now, investors are thin on the ground. They’d normally be 40 per cent of buyers, but now they’re down to around 20 per cent.”
Source: Domain