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WA Property Market Update September 2020
Off the back of a rough 2020 so far, the Western Australian property market is still hovering around the bottom of the cycle across both residential and commercial sectors. As we’ve outlined in the past couple of property updates, including our August edition, a glass-half-full approach to looking at the situation can uncover some important opportunities for savvy investors and first home buyers. For those already in the market, the message remains much the same in terms of looking into getting a better deal on existing loans as lenders continue to offer very attractive interest rates. As for those looking at purchasing, a squeeze on vacancies and increased demand offers a slightly different landscape than we’ve had in the past few months.
Residential Property Market
The two different subdivisions within the residential space – houses and units – paint two contrasting images at the moment. While the market for units continues to decline, now approaching the bottom of the property cycle, the outlook for houses is much brighter – and we’re now starting to see some recovery in that area. As we move into Spring, the over-supply issue that has plagued WA for a few years now seems to have been turned on its head, with fewer properties available for sale, and a likely reduction in selling days as is often the case with the change in season. Property demand has increased of late, particularly as border closures remain in place, so competition for quality properties is high– which is being reflected in many houses selling in just a few days, sometimes for higher prices than listed, where previously they may have remained on the market for much longer and fetched a sale price at or below original listings.
Given the generous State and Federal Government incentives available for home builders, there has been an expected reduction in the number of vacant blocks available. In fact, there was a 121% increase in vacant land sales when comparing July’s statistics to April’s. As such, there is likely to be a shortage of vacant land in the near future.
Commercial Property Market
Even before the COVID-19 pandemic, WA’s commercial property sector was already struggling. Particularly perilous was the retail market, especially given the steady growth of online shopping – something that has only been compounded as people move online to avoid going to the shops. Overall, despite some green shoots in the resource sector, confidence in general remains depressed. Unfortunately, COVID-19 has only made the situation worse with present economic circumstances increasing the risk of tenant delinquency, and as businesses struggle through the pandemic the lower-risk path for investors is seemingly quite well-trodden at the moment.
Opportunities in the Market
As long as lenders continue to offer lower home loan rates, there will be opportunities in the market. Whether you’re refinancing an existing loan or getting into your first home, taking advantage of lower interest rates now could mean significant savings and increased equity in the future, so it pays to be on the lookout now for the right property.
The Finance team at McKinley Plowman can assist by performing a health check on your existing loans, and ensuring that they meet your current needs as well as your goals for the future. If we identify that there is room for improvement, our competitive tendering process allows lenders to bid for your business, so you can secure the right loan facility at the best deal. Call us today on 08 9301 2200 or visit our website at www.mckinleyplowman.com.au.
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