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WA Property Market Update July 2021
The second half of the calendar year is well underway, and the continuing COVID-19 pandemic is starting to cause its fair share of problems in the eastern states, with rising case numbers and strict lockdowns dominating the headlines. Thankfully, things in WA are relatively stable as things stand (touch wood), and our strong economic performance continues to be reflected in our property market. In the property market update for July, we’ll take an overview of the situation in the residential and commercial markets at present and give a sneak peek at our upcoming property webinar.
Commercial Property Market Update July 2021
At last, commercial investors are starting to see some promising investment opportunities within WA, particularly in some retail settings. As local businesses begin to recover from the financial pressures brought on by COVID-19, hesitation regarding potential stability issues with tenants appears to be easing ever so slightly. While the state pulls through the worst of the pandemic from an economic perspective, certain asset classes are becoming increasingly appetising for investors. Investment-grade retail property such as neighbourhood shopping centres are highly sought after, given the prevalence of steady, long-term leases and a good mix of tenants. As consumer confidence rises and the population continues to grow (especially with few places to go for many would-be expats), there is understandable demand for this sort of asset, and this is being reflected in low stock levels available to the market.
Land holdings in established high street locations are also highly sought after, despite their inherent tenancy risk. This class of asset is also scarce in numbers, so investors will be lucky to secure anything in the near future. For those that do get their hands on something in this category, they can expect to see high underlying land value and strong development potential in the right locations.
Residential Property Market Update July 2021
New month, similar story – the WA residential property market is continuing to surge upwards, and July was no exception. Having said that, WA is still considered the most affordable state in which to buy and rent, and was recently recognised as the sixth-most liveable city in the world according to the Economist Intelligence Unit (EIU). Not a bad result! On top of all that, the state has also fared well with the COVID-19 pandemic relative to other Australian cities, thanks in no small part to our geographical isolation, so it’s no surprise that the property market has maintained its resurgence.
Looking at Perth specifically, the number of property listings sits around half what it was four years ago, and in the same time the median number of selling days has dropped by nearly two-thirds. This is indicative of the low levels of stock available and strong demand for property in the metropolitan area. In the rental market, the vacancy rate continues to hover around the 1% mark, less than half what it was in the September quarter 2019. Median rental prices have risen by nearly $100 per week in that same period. Put simply – there isn’t much stock around for potential investors at the moment, but those lucky enough to secure something in this market stand to enjoy outstanding rental yields.
Later on in September, we’ll be hosting a free property webinar alongside Lachlan Delahunty from Performance Property Advisory – where we’ll arm you with up-to-date knowledge on the WA property market, the current state of play in terms of lending and rates, and important information on gearing and Capital Gains Tax (CGT). Keep an eye on our social media and website for more information and a registration link.
In the meantime, if you’re ready to get started in property investment, or are looking at taking advantage of the excellent interest rates on offer by refinancing an existing home loan, contact the Finance team at McKinley Plowman on 08 9301 2200 (Joondalup) or 08 9361 3300 (Victoria Park); or via our website.
Data from REIWA
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