What is typically a slow few months for the Perth housing market, proved to surpass expectations with the market showing positive signs of growth during the winter months. This growth supports claims that the property market is in a recovery stage and with low supply now is a great time to get your investment underway.
Sales and growth activity traditionally slow down during winter as sellers tend to hold out until the spring weather kicks in to present their property to the market. That was not the case this winter with the Real Estate Insitute of Western Australia (REIWA) recording increases in median house sale prices in a total of 233 suburbs from May 31st to August 31st. This number is over half the growth recorded in 2020 with only 104 suburbs seeing an increase in price indicating the market is on its way to recovery.
Some of the top suburbs of growth include Brookdale (16 per cent) followed by Churchlands, Swanbourne, St James and Wembley Downs.
“The Perth property market is firmly in a recovery phase and many suburbs are feeling the benefits of this current growth cycle.” – Real Estate Institute of WA president Damian Collins
On top of this positive increase in suburb growth, Western Australia has recently been rated as the most affordable state in Australia for housing and rentals (Real Estate Institute of Australia’s Housing Affordability Report) despite price increases. WA Rentals are the most affordable in Australia requiring less than 20 per cent of a family’s average income for repayments.
Chart 1. Housing and rental affordability. Chart from REIWA,
Looking at the country as a whole, recent data from the Australian Bureau of Statistics showed an increase in July housing finance activity. Investor activity, in particular, was increased by 1.8 per cent for the month.
First home buyers and owner-occupier activity dropped off likely due to lockdowns over east and we may see further reductions in lending statistics as the Home Builder grant comes to an end.
Refinancing commitments are surging to an all-time high and it comes as no surprise. This month the Reserve Bank of Australia (RBA) kept the cash rate at 0.1%, working in favour of states that have experienced lockdowns. These low interest rates are likely encouraging many owner-occupiers to refinance and this number is expected to rise as more property owners give their home loans a spring clean.
Currently, you can expect variable interest rates to be around 3.07 per cent on average and roughly 181 mortgage rates on the market for under 2 per cent. This is great news for buyers and investors looking to secure land with a low-interest rate.
Growth in investor loans has also seen an increase and nearly double of that 12 months ago. More investors are re-entering the market which indicates overall confidence in the economy and is looking up for private rentals.
The market is looking hot and at perfect timing too as we exit our winter wonderland and move into the springtime madness. With high buyer demand, low market supply, interests rates at a record low and investor activity on the rise, now is a great time to secure your block of land and prepare your investment for sale.
To discuss your investment options contact Jubilee Home Builders on 08 9571 3512 or email us at [email protected]