WA Property Market Update February 2022
In last month’s WA Property Market Update, we touched on the resilience of our state’s economy putting us in a good position to ride the bumps associated with large COVID case numbers entering our community. Now we’re in February, and those case numbers are rising fast. There is still no firm date in place for borders to re-open, but even before then it looks likely that we will have been living with the virus active in our community for a period of time. But how might that affect our property markets going into 2022?
WA Retail/Commercial Property Market Update February 2022
The delay in reopening WA’s borders to the country, and indeed to the world, may have given some retail stores a reprieve, certainly in ensuring stability in their ability to trade under current conditions without fearing lockdowns. However, some industry experts speculate that the migration that will come with re-opening may address the dire worker shortages in the retail sector. Investors looking to get into this sector are still seeing some risk in terms of their tenant’s stability, but “business as usual” will really only return after hard borders come down.
There is still notable interest from eastern states investors looking to take advantage of higher rental yields in WA compared with their own neck of the woods. It seems investors are also looking for traditional high-street retail assets as these continue to provide the convenience-based shopping that customers are after. These trends look set to continue in some form throughout 2022.
WA Residential Property Market Update February 2022
The likely situation in the WA residential property market through February and beyond is not yet clear – however movement of people in and out of the state will play an important role. If current WA residents largely stay put, and an influx of people from interstate and international locations follows, the demand for housing will more than likely compound the current market conditions. Record low vacancy rates and rising house prices have put the WA property market into a growth phase, however despite this there has been relatively low investor activity given the prevailing conditions. That being said, strong rental yields and high demand could keep that upward pressure on house prices.
There is a strong likelihood that land purchase activity will slow in 2022 given a reduction in stock (as West Aussies snapped up land in outer suburbs off the back of generous government grants like HomeBuilder) and a desperate shortage in supply and labour. Should this be the case, demand for established houses will be increased further, again putting pressure on prices and stock in that segment.
As we touched on last month, interest rates are almost certainly going to be increased in the latter part of 2022, with some industry experts suggesting there may even be two rate rises this year. This increase on the horizon may not impact too many potential homeowners or investors in terms of their borrowing capacity, however the likelihood of an increase may motivate people to purchase sooner rather than later.
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