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WA Property Market Update December 2022
The end of the year is upon us! And with that, we wave goodbye to a year full of challenges, optimism, opportunities, and everything in between. In the property market, we’ve seen the market turn from strong value growth to a noticeable cooling off – prompted largely by consecutive interest rate rises courtesy of the Reserve Bank. Across the residential and commercial markets, it’s been far from smooth sailing with a number of factors here in Australia and around the world having an impact on things. However, there are reasons to be optimistic about the year ahead. Without further ado, here’s our WA Property Market Update for December 2022.
WA Residential Property Market Update December 2022
At the start of the year, much of the chat around the economy and property market centred around rental vacancy rates, COVID-19, house values, and the impending re-opening of WA’s hard international border. Particularly in relation to the latter, there was an expectation that the resulting flow of residents into WA might put further strain on the availability of rental properties – an investor’s delight, but a tenant’s nightmare. There was indeed an increase in median rental prices across the year – $450 to $490 from December 2021 to June 2022, and there is still a sever shortage of available rental properties across WA. Combine this with rising interest rates and an increase in cost-of-living expenses and it’s easy to see why there’s been a reduction in confidence in the market, particularly from owner-occupiers. Those looking to buy have seen their ability to service a loan that they could afford 12 months ago be reduced quite substantially – causing many to hold off on purchasing until they are able to get themselves into a home that they really want rather than settle for less.
WA Commercial Property Market Update December 2022
Looking at the office market in Perth, 2022 draws to a close following a mixed year. The first six months saw vacancy rates fall significantly for the first time in several years, including in West Perth where they had been sitting at 25% for some time. However, the back end of the year saw these creep back up again as refurbished stock re-entered the market and further reinforced the prevailing dynamic of supply outweighing demand. Local and eastern states investors remain active in the market, particularly interested in acquiring older stock and refurbishing them to compete for tenants.
With more businesses adopting hybrid working arrangements (a combination of work-from-home and being in the office), many are looking for smaller office spaces which will inevitably leave the larger assets vulnerable to long periods of vacancy. The impact of rising interest rates hasn’t yet fully been realised across the office sector, but the likelihood is that 2023 will also present some challenging conditions – watch this space!
Looking Ahead to 2023
At this stage, all signs point to further interest rate rises throughout 2023, certainly in the early part of the year. Should this have a similar impact to what it has already, the reduction in buyer interest and consequent slowing of growth in house values looks set to continue. However, looking across the country, WA does seem to be in an enviable position in its resilience in the current climate and relatively stable market when compared to the eastern states. While things may not be particularly exciting until after the interest rate rises cease, the WA Property Market may be in a great position to bounce back from 2022 and see a return to form in 2023.
No matter the state of the property market, the Finance team at McKinley Plowman are always on hand to help you get the most out of your home and business loans.
Consider a client we worked with over the last week – by finding him a better deal on his home loan (1.38% off his existing loan to be precise), we were able to save him around $7,000 per year. It goes without saying that’s a significant saving, and we love getting such awesome results for clients.
So, if you’re wondering how much you might be able to save, make 2023 the year you get your finance in order and potentially enjoy more money in your pocket – contact us via our website or on 08 9301 2200.
Data From: HTW Month in Review December 2022
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