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WA Property Market Update January 2024
As we see out January and venture further into 2024, the Western Australian property market presents a landscape of opportunity and resilience, having weathered economic fluctuations and policy changes in 2023. Last year was a testament to the market’s robustness, with Perth’s property market experiencing substantial growth, where other markets struggled. Now looking ahead to the rest of the year, what might be in store for us? From ever-rising house prices to the intricate balance of supply and demand, let’s see what 2024 could bring.
WA Property Market January 2024
As property analysts finalise their data for 2023, there are a few key items that shaped the market as we end January:
Surge in Perth Market: The year 2023 marked significant growth in Perth’s property market, setting new records in median house prices and the speed of sales. This has been driven by a combination of factors including limited supply due to a downturn in new building completions, an increased influx of immigration into WA (from overseas and from other states) and investment from Eastern states buyers. As the year closed, the median house price in Perth reached $590,000, a 24.2% increase from the 2020 low. The median unit price also saw growth, hinting at a shift towards more affordable housing options amid limited house supplies.
Market Dynamics: Despite rising interest rates, market momentum did not falter. Per Performance Property Group‘s Property Clock, houses edged closer to the “Buy Momentum” phase, indicating strong and rising demand. Units in Perth entered the “Buy Value” section, suggesting good investment prospects and significant opportunities in the WA residential market.
For the week ending 28 January, transactions fell 3.8% compared to the previous week, as reported by REIWA. The total number of transactions stood at 792, with houses experiencing an 8.3% decrease in sales, while unit sales climbed by 7.1% (likely due to the festive season). Land sales, however, remained steady, mirroring the previous week’s performance. When compared to a month ago, the total available properties for sale marked a 5.8% increase, yet this figure is still significantly lower by 45.9% compared to the same period last year, reflecting a tighter market.
WA Property Market Outlook for 2024
Price Projections: Forecasts from REIWA predict a 10% growth in Perth house prices for 2024. The rental market is also expected to see growth, although at a possibly slower pace.
Population Growth and Housing Shortfall: Western Australia experienced the highest population growth rate in the country, leading to a demand surge in the housing market. The imbalance between the growing population and the completion of new homes has intensified the pressure on the established homes market, resulting in escalating prices.
Economic Factors: The robust WA economy, marked by strong employment opportunities and low unemployment rates, supports the housing market’s resilience. The mining sector’s performance and favourable State Final Demand figures further bolster this outlook.
Inflation and Interest Rates: While inflation seems to be slowing, potential rate hikes by the RBA loom as a challenge. However, WA’s strong economic underpinnings and good track record through last year suggests the property market can withstand further increases. However recent inflation data for December 2023 show a reduced inflation figure which may indicate rate cuts by mid-2024.
Balancing Act in 2024: The upcoming year poses a delicate balance for the WA property market. Interest rates, economic conditions, and supply constraints will dictate the market’s trajectory. Adapting to these dynamics and strategic planning will be pivotal in navigating the complexities of the property market in Western Australia for 2024.
The Western Australian property market is set for an interesting 2024, with the outlook for the rest of the year resting on the complex matrix of economic, demographic, and industry-specific forces. The remarkable resilience evident in the market throughout 2023 sets a promising stage for the future, albeit not without its challenges. Investors and homebuyers alike must tread cautiously, staying on top of changes to interest rates, population trends, and the broader economic climate. The market’s ability to adapt and the strategic foresight of its stakeholders will undeniably shape its trajectory through 2024.
As interest rates do settle (which is predicted for the back end of this year), the McKinley Plowman Finance team are ready to help you ensure you’re getting the best deal on your home loan, commercial loan, vehicle loan, and more. Contact us today for a free initial consult, on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.
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