The Perth market bucked its traditional January slow start by recording its highest monthly increase since May 2021 – 0.6% according to CoreLogic.
At Red Fox, we saw strong buyer enquiry and turnout across all property types during the month, but our renovated character homes smashed it out of the park.
We had properties in Bedford and Inglewood attract 107 and 123 groups of buyers respectively, numbers we haven’t seen since May/June last year, with 19 and 17 offers received.
Yep, it was huge. The resulting sale prices were pretty fab too.
Whilst it’s early days, REIWA says the strong start gives them confidence that the market is on track to achieve their forecast growth of 10% growth for 2022.
Following tradition, there was a slight increase in the number of properties listed for sale in January versus December as sellers deferred launching until the new year, but supply still remains tight, with only 8245 properties for sale at the end of January. This is well below the 11k to 12k that REIWA considers being a balanced market.
Overall days on market increased a smidge from 14 to 15 but remain significantly below the long-term average of 30 to 40 days.
The outlook for the rental market depends upon whether you’re a landlord or tenant.
Whilst WA continues to be the most affordable place to rent in Australia, supply remains tight, with rents forecast to further rise this year.
There was a 25% bump in the number of rental properties available at the end of January versus the end of December last year but that reflects normal seasonal variances.
Perth vacancy rates are currently sitting at around 0.8%. A balanced market is considered to be 2.5 to 3.5%.
Concerns remain around the continued rental shortage. With borders closed, WA can’t attract the trades to build the homes needed to increase supply (the average time for a new home has blown out from 9 months to two years we’re told) and investor activity is currently tracking at 50% less than long term averages.
That said, once borders open the challenge will be housing those moving to Perth to fill our current 50,000 jobs shortfall. So we’re expecting more pain for tenants ahead.
So what’s next?
If you’re renting and thinking about getting into your first home, we think now is the time. There’s still good value to be found in the local multi-residential market with prices, on average, still well below where they were at the peak. And you can look to lock in your interest rate before the expected rise in 2023.
If you’re an investor chasing yields our view is the same – consider jumping into the multi-residential market now and fingers crossed enjoy the benefit of forecast price and rental increases this year.
And if you’re a house owner considering an upgrade, we’re suggesting doing that sooner than later too. Holding on for your own property to further increase means the gap will likely widen between where you are now, and what you want to move up to. That’s additional money you’ll need to find or fund.
For a no obligation, confidential chat to gauge where your property might sit and run through your options, call Nat now on 0405 812 273 – we’d love to help.