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WA Property Market Update January 2022
Welcome back! Our WA property market updates are back for the new year, and we’re kicking it off with a look at how housing values ended 2021, what the residential market looks like for the coming year, and what we saw in the office market based on towards the end of last year. Although the date for reopening the WA borders has now been thrown out, it’s difficult to predict anything with certainty for when they do finally come down, but given our strong economy it could be said that we’re in a good position to remain resilient even when large case numbers of COVID-19 enter our community.
Reviewing Housing Values in 2021
Throughout the course of our updates last year, we covered the booming property market in some detail – with most states around the country seeing a significant rise in housing values. Particularly here in WA, we saw low stock and low interest rates put upwards pressure on prices. Median house price in Perth increased from $490,000 to $520,000 in the year following the December quarter 2020, and median Unit price increased from $380,000 to $415,000 across that same period. According to CoreLogic’s latest report, growth in many of the capital cities, including Perth, appears to be slowing down – nationwide values grew 1.0% in December, compared to 1.3% in November. Negative net migration into WA caused by an extended period of closed state borders has been identified as a factor in the slowing conditions, with demand reducing as a result. Once the state opens up, the movement of people into and out of the state should then play a significant role in what the market does in 2022.
WA Residential Property Market Update January 2022
We’re well aware of how Perth’s property market fared throughout last year, but looking further afield to the Pilbara region, property values and rental yields have soared in recent times. The demand for housing to accommodate those working in the resources sector has seen some investors yield rental returns of over 11 percent – unheard of in the metropolitan area.
In the Perth rental market, median rent has remained steady at $450 per week for houses, and $410 per week for units over the past three quarters, however the vacancy rate remains under 1.0% (0.7% in the December quarter to be exact). From this data we can infer that median asking prices will likely remain high for the foreseeable future, until demand for properties normalises once borders open up and the fallout from that is fully realised.
WA Office Property Market Update January 2022
If we take a look Herron Todd White’s National Property Clock, the Perth office market is at the start of its recovery phase. Following a year of high vacancy rates and generous incentives for would-be tenants, it does appear that green shoots are emerging in what has otherwise been a depressed market. The limited pool of prospective tenants did prompt refurbishment activity from investors and owners, in a bid to attract those looking to upgrade their office space to bring their teams together after COVID-enforced working from home requirements in 2020 and 2021, or those taking advantage of the multitude of options available.
As detailed above, all of the predictions for what might happen in the coming 12 months is contingent on WA’s response to reopened borders and COVID-19 entering the community on an ongoing basis. One suspects that movement of people out of the state upon reopening will ease demand for properties, however migration into the state to take up job opportunities in our strong economy may offset this. The likely increase in interest rates in the latter half of 2022 may also impact the market.
No matter what happens this year, the Finance team at McKinley Plowman can assist you with determining your loan options and securing the best deal for your circumstances and needs. Give us a call today on 08 9301 2200 (Joondalup); 08 9361 3300 (Victoria Park); or you can contact us via our website.
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