partners for life
WA Property Market Update September 2022
The more things change, the more they stay the same. We’re kicking off the September 2022 edition of our WA property market update with another nod to rising interest rates. The RBA predictably increased the cash rate again since our last update, up 0.50% to 2.35%. The full impact of this won’t be clear until the dust settles and the cash rate stabilises, however in the short- to medium-term it will slow the growth in value that we’ve seen over the past 18-24 months.
WA Residential Property Market Update September 2022
Ongoing construction industry issues are continuing to bite in the property market. This includes a shortage of skilled workers, construction material supply chain problems, and high demand. Anyone looking to build or substantially renovate a home right now will struggle to get things off the ground. This has led to time and cost blowouts across the residential market, with construction costs up 10.4% in the 12 months to June 2022.
In terms of residential sales, the issues with construction has increased the appetite for established homes that have recently been renovated. Recent sales data highlights this trend, with several properties spending only a few days on the market and returning significant profits to the seller. Demand for these properties is prevalent not only for owner-occupiers, but for investors to. Whether you’re updating your existing home or purchasing a renovated investment property, up-to-date homes have a direct correlation with strong rental yields. The competitive rental market further reinforces this, with upward pressure on prices still prevalent in the market.
The bottom line is – if you’re able to get your renovations done at the right price (or you’re savvy enough to DIY the majority of it), you could stand to turn a decent profit at sale or significantly boost the potential rental price you’ll receive.
WA Commercial Property Market Update September 2022
In the commercial sector of this edition of the property market update, we’ll take a look at the office market in Perth. High vacancy rates within the market have been the story throughout the pandemic, and while that has decreased slightly in the last six months or so, it still remains around 15%. Occupancy rates are another important metric to look at, with many businesses still allowing their employees the flexibility to work remotely, either in a full-time or part-time capacity. It remains to be seen what the long-term impact of this will be. Some companies may move on to smaller premises upon the expiry of their lease as they don’t need the space, while others might take the opportunity to re-think their floor plan usage entirely and move to a more socially distanced, COVID-conscious arrangement.
The impact of the recent interest rate rises will also be clearer in the coming months, but investment activity in office grade commercial assets has not yet waned, at least in the short-term. Renovation projects on older premises have also been affected by the same labour shortages and material supply chain disruptions that the residential sector has been experiencing.
Despite concerns around construction costs and timelines, on top of rising interest rates and repayments, there are still opportunities in the market for savvy buyers and investors. If you fancy yourself as a DIY renovator, you could stand to turn a tidy profit on a house should you decide to flip it. Alternatively, you could increase its rental value and appeal, thus providing you a steady income stream while rentals are hard to come by for tenants. You can also explore your refinancing options with our Loan Review and Competitive Tendering Process, ensuring you’re getting the best deal you can on your home loan. Contact our Finance team today for more information – via our website or call us on 08 9301 2200.
Data from: HTW Month in Review September 2022
Thinking about becoming a client?
Book your free, no obligation consultation right now via our online booking system or get in touch to find out more
Already a client and want to get in touch?
Send us an email via our enquiry form or give us a call today