What’s the reason behind the rally in Perth’s real estate prices?

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Summary

  • According to a recent research, experts think that housing prices in Perth will increase by 10 per cent in 2021.
  • The real estate market is currently promising for the buyers, sellers, and investors, who are likely to purchase investment properties.

Experts believe that properties in Perth will increase by 10 per cent in price, as the Western Australia capital is experiencing a high demand for sales of houses due to the reduced levels in travel. The rise is expected to happen during 2021.

December 2020 witnessed a 42.5 per cent surge in property sales compared to December 2019, as per a Real Estate Institute of Western Australia (REIWA) report.

According to the REIWA President Damian Collins, Perth residents took advantage of the current reduced travel situation, which was beneficial for the higher real estate prices.

Mr Collins added that December is usually the slowest month for housing sales, as most Perth residents go for the summer holidays.

However, the median house price tag in Perth was steady at A$480,000, while some suburbs witnessed a 45 per cent growth in value in December.

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Kelmscott, a southeast suburb in Perth, faced the largest price rush in December – a rise of 6.2 per cent, resulting in A$375,000 as the final property value.

Another Perth suburb Yokine saw a 4.8 surge last month, with a house price at A$650,000.

Housing prices in Wellard jumped 4 per cent to A$399,500.

Overall, 16.5 per cent more people registered for buying a house, which will likely result in even higher property prices in the following months.

ALSO READ: Did Real Estate Agents play any role in the surging house prices?

What is the expert opinion?

Some experts think that the current housing market situation could be beneficial for both the buyers and the sellers.

As most banks have made interest rates all-time low, many first-home buyers might run towards their purchase. The overall real estate market is also looking optimistic, which may attract more customers in the upcoming months.

DID YOU READ: Why is RBA keeping interest rates at a record-low?

Professionals agree that the future buyers may feel they will miss out if they do not purchase now, which could be another factor for the increase in property sales.

However, there seems to be a higher demand from buyers than what the market has to offer. For that reason, purchasing a property could be challenging, as there are not many options available in the market.

According to Ray White CEO Mark Whiteman, the power balance between supply and demand had already started to alter, as more people were prompted to sell their properties.

Mr Whiteman added that the current situation caused by the coronavirus pandemic would be in sellers’ favour, after five years of low housing value.

Have investors expressed a higher interest in buying?

As the house prices are forecast to jump even higher, investors are likely to participate in buying more investment properties.

However, professionals advised investors to make the final decision sooner than later in case the real estate market in Perth becomes less affordable.

What about the rental properties?

There were 3,655 properties leased in Perth in December, which is a nine per cent growth compared to November 2020.

Even as the rental market throughout Australia suffered due to the travel restrictions and less international students coming to the country, Perth rentals seem unaffected.

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