WA Property Market Update April 2021
Another month is already upon us! 2021 is absolutely flying by, and the WA Property Market seems to be going from strength to strength off the back of a positive month of April. Consumer confidence continues to rise, interest rates remain low, and rental properties are still in such short supply that home transactions are well and truly on the up. The commercial/retail sector has remained steady (but with plenty of room for improvement); and it’s there that we start the WA Property Market Update for April 2021.
WA Commercial Property Market Update April 2021
The landscape within the commercial property sector in WA has sadly not changed very much since our last update. The hottest commercial property asset class is investment-grade retail property, for instance neighbourhood shopping centres. That being said, stock is very limited as those currently in possession of such properties have very few reliable investment opportunities elsewhere should they decide to sell up (and therefore very little incentive to move on).
Given many businesses have been struggling over the past 18 months or so, leasing agents are treading carefully when it comes to leasing out vacant spaces, with most (understandably) wanting some assurances that an incoming tenant has a satisfactory level of business acumen to stay afloat in the long-term without needing to rely on Government incentives. The slightly subdued commercial market in Perth appears to be continuing for at least a little while longer, however there are still some attractive investment opportunities out there for those who aren’t too averse to risk.
WA Residential Property Market Update April 2021
If you’ve made an appearance at a home open in Perth recently, chances are you won’t need us to tell you that the residential property market was still incredibly competitive during April, and this looks set to continue. Low interest rates and generous Government incentives means we’re seeing not only increased construction activity (compared with the past few years); but also an uptick in the number of first home buyers entering the established property market – particularly where the First Home Owner Rate of Duty (FHOR) applies, giving eligible first home buyers a full or partial rebate on their stamp duty obligations. Perth’s fringe suburbs have seen plenty of action in this economic climate, especially since the introduction of the Homebuilder scheme and the like. It appears the longer-term value appeal and central location of some of Perth’s more established suburbs are coming off second-best to the relative affordability and new-build appeal on properties slightly further from the CBD.
REIWA’s figures show an astonishing 181.39% increase in loan activity for first home buyers. This is further reinforced by data indicating that nearly half of all transactions in the December quarter 2020 were between $350,000 and $800,000 – another sign that plenty of West Aussies are entering the property market for the first time. CoreLogic have identified a potential tapering of the increase in value seen across the WA Property Market up to April. While there is no expectation that prices will fall dramatically, the accelerated rate at which house prices have increased may be reaching its peak. This is important to ensure Perth remains relatively affordable and doesn’t end up pricing out first home buyers like in some states over East.
WA Rental Property Market Update April 2021
A significant influencing factor in the increase in activity among the first home buyer demographic is Perth’s critical rental market situation. The median weekly rent across the city has jumped to $410 per week, up from $345 only 18 months ago. The vacancy rate has also worsened over that time, now sitting at a measly 0.8%. Put simply, prices have gone up because supply isn’t meeting demand. Further to some of the points we’ve made in previous market updates, this is bad news for tenants but a potential goldmine for those looking to invest in property. Similarly, tenants with the financial capacity to get into their own home certainly appear to be trying their hand at doing so, as the weekly outlay on rent is fast becoming the same, or at least very similar, to potential mortgage repayments. While home ownership may be out of reach for many at this moment in time, the current rental market in WA is a timely reminder that being in your own place is often the better solution long-term.
How MP+ Can Help
If you’re ready to get into a home of your own to escape the rental game; or you’ve seen the low interest rates and want to take advantage by refinancing – the MP+ Finance team on hand to assist. Call Paul Moran and Paul Tate today on 08 9301 2200 (Joondalup); 08 9361 3300 (Victoria Park); or contact us via our website at www.mckinleyplowman.com.au/contact-us/.
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