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WA Property Market Update – February 2023
Unless you’ve been living under a rock, you’ll be well aware of the continued rate rises from the Reserve Bank throughout 2022 and into 2023. While this is expected to happen at least a few more times over this year, many commentators suggest that it’ll subside after a few months. Once it does, we may see some greater consumer confidence across all sectors, as most West Aussies will have clarity over their ongoing mortgage repayments, and how that impacts their household budgets. In this edition of the WA Property Market Update, we’ll take a look at the residential and industrial sectors, both with interesting opportunities and outlooks for the year ahead. We hope you enjoy the WA Property Market Update for February 2023.
WA Residential Property Market Update
Following the unpredictability of 2022, it appears that we’re entering 2023 with a greater degree of confidence in the WA property market. As interest rates rise, and some potential buyers are priced out of the market, there are a number of West Aussies with plenty of savings in the bank, waiting for rates to level off before entering the market. Many would-be sellers are holding off on putting their house up for sale, as securing their next place is proving difficult. Furthermore, new builds are being held up with supply chain bottlenecks and a lack of skilled workers to complete homes within a reasonable time frame. The under-supplied labour market means that if and when new migrants enter the state to fill available roles, the demand for property in a market with already low stock will put further upward pressure on prices.
This multitude of factors means that those in the market already (homeowners and investors) are in a good position to benefit from value growth; while those looking to buy into the market, and rental tenants, are in a predictably tough spot. The cost-of-living pressures we’ve seen over the last 12-18 months aren’t likely to reduce until at least the back end of this year, more likely 2024. Once that does start to calm down, however, we should see better serviceability and increased buyer confidence in the residential sector.
WA Industrial Property Market Update
By all accounts, it’s good news in the WA industrial property market. It appears to be steadily climbing towards it peak, so now it’s worth looking at how sustainable that peak could be. Tenant demand for industrial property in WA gained strength through 2022, particularly for new builds. However, land is becoming increasingly scarce, even in newer industrial estate on the outskirts of Perth. This indicates that the growth in values may have some legs to it, because as we’ve seen in the WA rental market – high demand and low stock pushes prices up. Also reinforcing a buoyant industrial sector is the strong mining and resources industry. Couple that with rising demand for large-scale warehousing to accommodate e-commerce storage requirements, and there are plenty of players in the market in need of industrial-spec space to lease. Despite a lag in response to rising interest rates, there are plenty of reasons to be positive about the industrial property market in WA as we move through February and into the remainder of 2023.
If the rate rises are bringing your mortgage repayments up and up, and you want to do something about it – you can. The Finance team at McKinley Plowman recently saved clients over $11,000 per annum on their mortgage repayments by refinancing their loan. What could you do with that sort of extra cash at the end of the year? We’d love you help you save money on your loan repayments too – give us a call on 08 9301 2200, or contact us via our website.
Data from: HTW Month In Review February 2023
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