Perth is on course to produce two active years of growth according to Domain’s Property Price Forecasts – February 2020.
The real estate portal is forecasting Perth’s median house and unit price to rise by 5% in 2020, then by around 4% in 2021. By the end of 2020, Perth’s median house price should be $564,000.
Domain says a combination of stronger population growth (Western Australia’s population growth is forecast to increase from 1% in 2018-19 to 1.5% in 2020-21), faster economic growth driven by a mining sector rebound, and a tighter rental market will contribute to the city’s real estate growth.
Will Trainer, Director Raine & Horne Cannington-NRAS agrees the rebounding resources sector will have an impact on Perth’s real estate values. “There are other factors too contributing to property price growth including more financial incentives for overseas workers to come to Perth, more money for WA from the GST, and many infrastructure improvements such as road extensions, which will create jobs. We’ve had much better news on the economic front lately.”
Stronger economic news has also translated into more buyer enquiries in the Cannington region where the average three-bedroom house price is $380,000 said, Will. “If vendors price their properties sensibly, they’ll achieve faster sales.”
Will agrees with Domain that the tightening in the rental market is a useful sign Perth’s sales market is on the move. “Eastern state investors are already eyeing off Perth’s decent rental yields and real estate affordability,” he said. “With vacancy rates tightening from dropping to an average of 1-2%, some rental properties are leasing for up to $25 a week more than the market price.”
Will continues, “Better rents will encourage more investors to buy into markets such as Cannington, Queens Park, Bentley, Kenwick, East Cannington and ultimately drive up capital growth”.
“Once the investors start to come into our market, the first home buyers will follow forcing up competition for property.”