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WA Property Market Update October 2023
In light of recent distressing events in the Middle East, Australia, although geographically distant, braces for the inevitable economic impact, particularly a potential surge in energy prices. This global unrest emerges during a time when we had otherwise anticipated stability, particularly regarding interest rates, with speculation of potential rate cuts in 2024. However, the prevailing situation might prompt the Reserve Bank of Australia’s to pivot back towards increasing rates again, possibly impacting the property market along with other sectors. For the time being though, let’s look at the property market in WA as of October 2023.
WA Residential Property Market Update October 2023
The Western Australian residential property landscape has experienced a dynamic shift, particularly interesting for first-time homebuyers. Strategies like fractional ownership (Having a % ownership of a property) and rentvesting (Buy an investment property to rent out and rent a property to live in), combined with government initiatives, are empowering new buyers across both urban and regional areas. While properties in inner Perth attract professionals, outer suburbs like Brabham, Craigie, and Edgewater see a mix of first-time buyers, investors, and downsizers competing, reflecting a robust market and increasing values. Furthermore, activity is increasing in coastal regions like Rockingham and Mandurah, with broadening appeal for WA locals as Perth properties attract greater investment from interstate buyers.
For those looking to rent, the vacancy rate in Perth remains critically low at 0.5%, with little signs of improvement until more stock hits the market. Crucially, the average tenant is spending 35% of their income on rent for a house, and 26% if they are in a unit. This trend is only going up, meaning a greater proportion of income will be spent on rent moving forward until the vacancy rate and stock issues are eased.
WA Office Property Market Update October 2023
Perth’s office property market in 2023 paints a complex picture. While the CBD has seen a slight increase in vacancy rates, West Perth shows promising recovery, thanks to new demands from various sectors. The ongoing work-from-home trend continues to influence market dynamics, with companies preferring smaller, flexible spaces over large-scale premises. However, this demand hasn’t significantly pushed rental rates up. The sales aspect remains cautious, with notable preferences towards properties that promise secure and lucrative lease terms. The market’s dichotomy is evident, leaning towards premium spaces, forecasting a cautious but optimistic outlook for 2024, backed by Perth’s strong economic foundations.
Navigating through economic uncertainties fuelled by global events and local market trends, Western Australia’s property market is poised for a period of activity. Residential spaces see innovative buying strategies and governmental support driving a competitive market, while the office sector experiences challenges caused by changing work patterns.
As values change and interest rates move, it is critical to ensure that your home loans are working for you. The Finance team at McKinley Plowman are working alongside clients to get the best deal for their circumstances, manage the transition from fixed rate periods to variable, and ensure their loans are optimised. To see how we can help you do the same, please reach out to us on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.
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