The Australian state bucking real estate trend as house prices dip across the country due to rising interest rates and cost-of-living pressures
- WA seems to be diverging from the national trend of falling housing prices
- Real Estate Institute of Western Australia predicts growth of two to five per cent
- REIWA also anticipate larger sales rates in the low to middle price brackets
One Australian state is defying a national downturn in the housing market brought on by rising interest rates, cost of living pressures and a shortage of homes.
The Real Estate Institute of Western Australia is staying positive in their 2023 outlook, predicting moderate growth of between two and five per cent in house price in Perth over the next 12 months.
‘Longer-term, as prices decline, interest rates stabilise and wages grow, we expect to see market conditions improve,’ PropTrack’s director of economic research Cameron Kusher said.
West Australia seems to be defying a national trend of falling house prices spurred on by rising interest rates, cost of living pressures and home shortages (pictured, Sydney house for sale)
‘Hopefully, we will also see more investors return to the market, creating more rental supply.’
According to CoreLogic research, house prices in the rest of the nation for the end of 2022 were weaker, with an overall drop of 5.2 per cent in property values.
CoreLogic’s research director Tim Lawless said capital city values fell sharply after the first four months of last year, as the RBA began the fastest rate tightening cycle on record.
‘Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows,’ said Mr Lawless.
‘Since then, CoreLogic’s national index has fallen 8.2 per cent following a dramatic 28.9 per cent rise in values through the upswing.’
However, the same data shows Perth finishing the year up 3.6 per cent, with a 5.7 per cent boost for WA’s regional areas.
The state was only outperformed by South Australia, with Adelaide and metro areas enjoying 10.1 per cent growth and regional SA recording a whopping 17.1 per cent increase in property values.
REIWA’s CEO Cath Hart said Perth’s forecast price growth this year will be supported by ongoing low supply and strong demand – although listings remain low.
The Real Estate Institute of Western Australia, REIWA (pictured), predict WA housing to grow by two to five per cent over the next 12 months with high demand for few houses
‘Current listing levels are 10 per cent lower than they were this time last year, and almost 34 per cent lower than what they were three years ago,’ Ms Hart said.
‘As building completions increase over the next 12-18 months we anticipate listings will start to increase, however they will remain below historic averages.’
Executive Director for the Property Council of WA Sandra Brewer agreed that was the projection for the post-Covid property market.
‘WA has benefited from Covid stimulus packages, with a huge number of housing starts,’ she said.
‘But generally there has always been an undersupply of housing in Perth.’
For buyers, it may be better to act sooner than later, as the Reserve Bank resumes interest rate decisions from next month.
REIWA have also signalled that West Australian houses in the low to middle price brackets are expected to sell at greater rates over 2023 (pictured, house auction)
Further interest rate rises could spell reduced borrowing power and cause buyers to temper their expectations accordingly.
REIWA signalled they are anticipating greater sales activity in the low to middle price brackets in 2023.
Looking to regional WA, Busselton was a top performer last year, as all regional centres saw median price growth.
‘Regional areas have also benefited from an increase in the work-from-home/micro business trend,’ said REIWA’s Cath Hart.
‘The idea of having to live where you work has changed significantly post-Covid.’