WA Property Market – 2020 in Review
What a year 2020 was. Last year threw more curveballs and brought forth more global issues than anyone would have expected – but how did the WA property market fare overall? Our previous pieces on the WA property market, looking at various months throughout 2020, painted a picture of uncertainty, adaptability, and perhaps most of all – optimism.
The property market is never 100% predictable, even at the best of times, but a global pandemic and the subsequent economic struggles made the futures of residential & commercial markets even harder to predict. For the 2020 WA property market roundup, we’ll have a look at both the residential and commercial markets, how they fared in 2020, and what the prospects are looking like as we move through 2021.
WA Residential Property Market – 2020
Both sectors of the WA property market sat at or near the bottom of the national property cycle for much of 2020. Despite this, the residential market began to pick up some momentum as the year progressed. Government grants provided at both federal and state level (e.g. HomeBuilder) prompted an uptick in residential construction projects, seeing vacant land sales increase by over 70% from December 2019 to June 2020 – even boosting sales in areas where land had previously proved difficult to shift.
The established market also saw an upturn in fortunes, while the rental market shifted from favouring tenants (low rent, high vacancy rates) to favouring investors (low vacancy rates, dozens of applications per rental property, prospects of raising rent prices in the near future). Overall, it’s fair to say that for those looking to get into a home of their own this coming year are in the market that’s right for them.
WA Commercial Property Market – 2020
The global COVID-19 pandemic had a noticeable and detrimental impact on commercial and retail property in WA – something that compounded the misery in an already struggling sector. Many of WA’s non-essential businesses were forced to either close their doors (some permanently), or significantly alter the way they do business in order to keep up with the Government-imposed restrictions around the virus. However, as the year wore on and businesses and consumers adapted to the changes, confidence started to grow in the second half of 2020.
Retail spaces continue to experience high vacancy rates and low overall demand when compared to supply, and while the air of uncertainty about the state’s future in the face of COVID has lifted slightly, there are lingering doubts when it comes to potential tenants taking on the financial burden of a new lease. The commercial sector is still approaching the bottom of the property cycle, and depending on a glass-half-full or glass-half-empty outlook, it seems to some that either the only way is up; or that we have a long way to go before we start seeing improvements.
What’s Next for 2021?
All told, there are plenty of reasons to push through 2021 with some optimism. It’s hard to know with 100% certainty what the future will hold (and 2020 was a prime example of that), but despite that there is a sense that we can look forward to some level of growth this year. With the resources sector continuing to perform well, and a State Budget surplus of $1.2 billion, Western Australia is in a great position to recover strongly from the pandemic.
If you’re ready to take the plunge into property investment this year, buy a home, or are looking to refinance your current home loan, call the Finance team at McKinley Patrick today to see what we can do for you. Call us on 08 9301 2200 or visit www.mckinleyplowman.com.au/services/finance for more information.
Data retrieved from Herron Todd White Month in Review December 2020
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