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WA Property Market Update – March 2023
Wouldn’t you just know it – as if the lasting impact of the COVID pandemic on the economy wasn’t disruptive enough, another layer has been added. Recent events in the US banking sector have amplified prevailing uncertainty and brought about accelerated change here in Australia. As with other disruptive factors such as interest rate rises and inflation rates, the lasting effect of these recent developments on the property market may take some time to be fully realised, but it certainly isn’t being received well given current conditions. All that being said, though, the WA property market has been remarkably robust even as other major centres around the country push through turbulent times. Here’s our WA Property Market Update for March 2023.
WA Retail Property Market Update – March 2023
The retail sector in WA kicks off the year with some hesitation among investors while the RBA continues to bump interest rates up. As you can probably imagine, many aren’t keen to put their hands in their pockets until there is greater certainty around the interest rates, choosing to hold off until the dust settles and inflation is reined in.
Neighbourhood shopping centres continue to be an asset prized by the commercial property investor, particularly those with Woolworths and/or Coles comprising part of the tenancy. This “non-discretionary” tenant base appears to give investors greater certainty over the viability of acquiring such an asset. That being said, there hasn’t been a great deal of purchase activity in this space, and with long-term interest rate pressures still an unknown for at least a few months, this is likely to continue. Overall, the outlook is one of uncertainty, with a potentially challenging 2023.
WA Residential Property Market Update – March 2023
If you’ve driven past a public rental property inspection recently, you’ll likely have noticed the crowds of prospective tenants looking to get into their next place. Vacancy rates in WA, particularly in the Perth metro area, are at a measly 0.6% as of December 2022. Compare this to a “balanced” rental market of 2.5 – 3.5% vacancy and there’s no doubt at all as to the situation in which tenants find themselves. Throughout the height of the pandemic and beyond, we’ve covered at length the many factors contributing to the current rental crisis, with construction delays coming into that mix more recently to make life even tougher.
On the other side of this particular coin is a very attractive market for investors. WA investors and East Coast punters alike are well aware of the upsides to this market. Low vacancy rates, high demand, and fewer alternative living arrangements for tenants means that rental prices can go up (as they have) and returns on investment follow handsomely. Couple this with the likely marginal increase in house values throughout 2023 and a continuation of construction industry delays and price blowouts – and investors can be confident of great returns.
Until interest rates settle, there are few absolute guarantees that can be made about the WA Property Market as we march through 2023. That being said, it is a good time to be an investment property owner, and opportunities for refinancing your existing home loans are out there for mortgage holders. The Finance team at McKinley Plowman have been helping clients achieve fantastic savings on their loans as rates increase, and we’d love to be given the opportunity to help you do the same. Please don’t hesitate to reach out to us on 08 9301 2200, or contact us via our website.
In case you missed it: We held a property webinar on Thursday 23 March, and the recording is available on the MP+ website here: Webinar Recording: WA Property Market – Suburb Profiles, Opportunities, and the Road Ahead [w/Performance Property] | McKinley Plowman
Data From: HTW Month in Review March 2023
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