With a number of its regions showing green shoots of recovery following a tumultuous year marked by COVID-19, is it finally Western Australia’s time to shine?
Driven by strong demand and cheap credit, Perth stands to see house prices jump by 19 per cent in 2021 – the highest growth prediction for all major capital city markets based on the latest ANZ economic insight.
According to Right Property Group founder and director Steve Waters, along with record-low interest rates, government support programs and a “unique wealth effect” have been the engine behind the growth in WA markets post-pandemic, providing a sense of security to home owners and investors alike.
Over the past year, WA’s capital city has experienced high asset appreciation, becoming “quite a unique market”, Mr Waters said in a recent episode of The Smart Property Investment Show.
In fact, Perth’s vacancy rate currently stands at its lowest level in 40 years.
The experienced property expert noted that the “massive undersupply” was born as a result of net population growth amid the COVID crisis.
As such, vacancy rates across several areas of the state currently stand at below 1 per cent, with the city of Busselton leading the charge.
Moreover, in some regions, rentals are spending just 11 days vacant, causing increased competition and putting upward pressure on rent prices.
“There are areas there that are certainly undersupplied. And we’re seeing that in our own portfolios, where we’re starting to put our rents up because we can,” the agent commented.
Ultimately, Mr Waters said that he favours Perth because of its unique interaction between owner-occupiers and investors, which is generally a good growth driver across the housing market.
“Perth is quite a unique market, and [I personally] don’t want to be in areas which are heavily dominated by investors because investors in Perth tend to be a little transient.
“I really want to be concentrating on areas that are owner-occupied in the majority. That will always have that emotional pull with investors trying to come in over the top and be a part of that action, as opposed to areas which are 90 per cent investor-driven. That scares me,” he explained.
In addition to its burgeoning mining sector and strong economic recovery, the way the WA navigated the pandemic has also instilled a sense of optimism in the housing market.
Moving forward, investors looking to splurge on the WA are advised to “buy selectively” by doing their due diligence, paying particular attention to area and property selection, as these remain critical in maximising the benefits of the market upswing.
Source: smartpoperty