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Outlook good for WA next year

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    Things are looking good for the Western Australia property market next year, according to the Real Estate Institute of Western Australia.

    After hitting a bottom during 2020, the property market should experience steady growth in both the rental and sales market – something not seen since 2013, according to REIWA’s 2021 outlook.

    REIWA president Damian Collins said 2020 has been an unusual year in the property market. However, despite the impact of the COVID-19 pandemic, WA is showing positive signs, Collins said.

    “Sales activity in Perth at the start of the year was sitting at approximately 2,900 transactions per month, followed by an uptick where we are now seeing nearly 4,200 transactions,” Collins said. “Listings for sale have reached a 13-year low with just over 10,000 listings on reiwa.com, putting upwards pressure on prices.”

    Read more: More Perth first-home buyers set to enter the market

    Agents on the ground are reporting that it’s not uncommon for sellers to field multiple offers, including being offered thousands more than the advertised price – something unseen since 2013, according to REIWA.

    “With record-low interest rates looking like they will be around for a while, many buyers are finding it cheaper to buy than rent,” Collins said. “This is one of the reasons why we can expect sales activity in 2021 to continue gaining momentum.”

    In 2020, Perth had the lowest median house value of any capital city in Australia. However, with the increase in population growth due to people returning to WA from overseas and interstate, that could change next year, Collins said.

    “While house prices were largely stable over the last 12 months, it is expected that prices will increase between 6% and 10% over the next 12 months,” he said.

    Rental market

    Perth’s rental market has reached crisis levels, with the vacancy rate falling to below 1% due to the follow-on effects of the pandemic – and Collins said renters should prepare for continued competition.

    “Population growth increased 1.5% during the 12 months to March 2020, and with more than 1,000 international arrivals expected per week, plus the domestic borders opening, the rental market could get more competitive for renters at the start of the year before it gets any better due to the low levels of available rental properties,” he said.

    The dwindling stock of rental properties has resulted in upward pressure on rents, with the median rent rising 8.5% from $350 to $380 per week over the last few months.

    “We can expect rent to grow an additional 10% to 15% throughout 2021,” Collins said. “However, even with the increase, WA is still the most affordable capital city to rent in across all Australian states and territories.”

    Regional WA

    REIWA projected that overall market conditions in regional WA would improve in 2021 as a result of population growth and a COVID-19-driven change in lifestyle preferences. Significant improvement has already been seen in Karratha, Port Hedland and Kalgoolie Boulder during the latter half of 2020, with increased sales activity and rental demand.

    “Increases in certain mining areas are due to companies moving their staff closer to the mining sites to live while the borders are closed,” Collins said. “While this has put upward pressure on the rental and sales market, other regional centres are also experiencing lowered vacancy rates, limited rental stock and an increase in median rents.”

    Original Article