We’ve dusted off the Red Fox crystal ball to have a look-see at the Perth inner north market for 2022.

So let’s sit down, peer into the depths, and take a stab at predicting what we think is going to happen this year.

Prediction #1: It’s going to be bumpy

Yeah, ok. You don’t need to be clairvoyant for that one.

But before we get into all that, where did we end up in 2021?

According to RP Data Corelogic, the Perth market showed an overall increase of 13.1% for the calendar year. What we know is that this % increase wasn’t across the board, with suburbs and property types, as per usual, performing quite differently. 

Overall, Perth’s median price of $520,000* is still below the peak of $545,000 reached in 2014.

Locally, the big demand was from trade-up buyers looking to upgrade to a larger family home, on a larger block, more often than not in a higher-priced suburb. 

We were thrilled to set two street records in Inglewood during 2021, where prices for renovated character homes on full blocks now appear to be above the 2014 high.

We also saw strong demand from right-sizers for quality character homes or newer builds on smaller lots, with the highest demand and prices being achieved for the best presented and/or those recently renovated.

The inner north multi-residential market (units, apartments, villas, and smaller townhouses) finally showed improvement in 2021, albeit with prices still back from where they were at the peak.

2021 saw a trend in landlords offloading their underperforming investment properties, as well as first homeowners deciding to make the jump up to larger properties, as the price gap between multi-res values and houses started to widen. 

At the end of December, there were 8511 properties for sale in Perth – 7% less than November but 4% higher than December 2020.

The median time to sell a house in December in Perth was down to 14 days. Red Fox’s average for the entirety of 2021 was 8.

Prediction #2: COVID is coming

A statement of the obvious.

COVID and the opening of our borders will have an impact on the Perth property market. 

First off, we’ll likely see a population boost as people return to the state or migrate for employment. All of these will need to find rental accommodation or permanent homes.

REIWA has predicted a spike in demand this year due to this anticipated influx and at Red Fox we’ve been receiving inquiries from eastern states and overseas buyers planning to move to Perth for months.

Whilst interest rates were initially speculated to rise in 2023, there is now talk of a potential delay if the economic recovery slows as the virus takes hold and business continuity due to illness is impacted. We’re already seeing instances of small businesses closing over east due to staff shortages as well as impacts on supply. It’s something banks and economists will be keeping a close eye on.

All of which leads us to assume that…

Prediction #3: Perth property prices will continue to rise in 2022

Because basically more people = more demand.

How much is my property worth?
We'll prepare a full appraisal report of your property based on our vast local knowledge and market activity.
No addresses found. This could be a new address, or you may need to check the spelling.

Debt is still cheap, housing supply is still low, unemployment is low, we’re the most affordable capital city in Australia, and the local economy is continuing to grow.

So unless it all goes completely tits up, we’ve got no reason to assume the upwards trend (bearing in mind prices overall are still below where they were in 2014) will reverse any time soon.

Our view is that in 2021 the market was playing catch-up to some extent after the anticipated market recovery was stalled by COVID in early 2020.

How much will it go up? Anywhere between 6 & 15% depending upon which forecaster you put your faith in. REIWA is suggesting 10%.

Prediction #4: The rental market will get tighter

Whilst the return to growth will give some investors confidence to get back into the market, there are investors who are hanging out to get out.

We’ve sold more ex-investment properties in the last 6 months than we probably have in the last 5 years. As tenants move out, some landlords are choosing to sell out. That’s not good news for the rental market. And the situation could worsen if the government brings in too many changes to the Residential Tenancies Act which is currently under review.

With a likely population influx, builders struggling to complete new homes due to labour and materials shortages, and already record-low vacancy rates, we expect the pressure on rents and rental vacancy rates to continue in 2022.

Prediction #5: Video walk-throughs & virtual viewings will become the norm

Basically, if you’re thinking of selling in 2022, to mitigate against potential restrictions and quarantine, you want to ensure that your agent is using video to do pre-recorded and virtual property walk-throughs. 

We saw the writing on the wall as soon as COVID hit our shores, with Nat starting the use of property video walk-throughs at the beginning 2020.

Video has proved to be invaluable in times of snap lock-downs and for interstate and overseas buyers, as well as attracting great feedback from local buyers.  

As the virus starts to spread in our community, it’s essential to provide buyers with a means to view property virtually if they’re unable or nervous about attending public inspections. We’re gob-smacked by the number of agencies still ignoring this medium.

Prediction #6: Vaccination may become a standard requirement to attend a home open

This one is going to be controversial. But it’s a conversation we know agents are already having with sellers.

Owners have a right to decide who enters their property. And we expect some sellers, particularly those who are elderly, immunocompromised, or in professions where vaccination is mandatory (75% of the population here in WA), to start exercising their rights to refuse entry to buyers who aren’t vaccinated.

So strap in…

2022 promises to be a wild ride once our WA bubble is burst and we see what it really means to live with COVID. 

If you’re thinking of selling…

And looking for advice and feedback in relation to your specific property, we’d love to help.

Call us now on 0405 812 273 and we’ll tee up a time to come and see you for a no-obligation, complimentary chat.

*as reported by reiwa.com.au.