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WA Property Market Update September 2023
As we transition out of September and into the last quarter of 2023, the Western Australian property market demonstrates a dynamic landscape for prospective buyers and investors. We’ve now seen three consecutive months of the RBA holding interest rates steady (currently at 4.10%), and with it a sense of calm and increased economic certainty. The balancing act of reining in inflation without causing a recession is tough, but positive signs are here at least for the time being. Although, this could change as recent higher than expected inflation results may be the trigger for at least one rate increase before the end of the year. This month, we’ll be looking at the state of play in the residential and retail property sectors, and a forward-looking perspective for what’s to come as we round off the year.
WA Residential Property Market Update September 2023
The residential property market in WA has exhibited a remarkable resilience amidst economic uncertainties. With an array of modern apartments and family homes entering the market, prospective buyers are presented with a range of choices catering to their preferences and budget. Many West Aussies are venturing into home renovations, with an apparent stabilisation of construction costs, bringing “fixer-uppers” back into focus.
While properties requiring attention and renovations are hot assets right now, so too are those that have recently undergone renovations. One notable example comes from Kensington, in Perth’s inner southern suburbs, where a 1949-built house, purchased for $910,000 in November 2021, underwent extensive renovations and was sold for a staggering $1.75 million in May 2023, reflecting a lucrative venture despite high renovation costs.
Perth’s apartment market also holds promise, especially with minor renovations. For instance, a 1967 built unit in East Fremantle, purchased for $295,000 and renovated modestly, sold for $385,000 in May 2023, reflecting a healthy profit margin. In the northern suburbs, well-renovated properties are fetching solid premiums, creating a favourable scenario for those considering flipping properties. The southern suburbs too are attracting renovators, especially around Rockingham and Mandurah, with properties in the $300,000 to $450,000 bracket coming into and out of the market rather quickly.
WA Retail Property Market Update September 2023
Western Australia’s retail property market seems to be lingering at a lower cycle. However, entry-level retail investments are becoming an affordable avenue for astute everyday investors. The once well-placed households underpinning retail sales are feeling the pinch due to inflation and recent successive interest rate hikes from May last year. Recent rate stabilisation will have its own impact, and additional hikes on the horizon could further tighten consumer spending – however we’ll have to wait and see on that front.
Investment-grade retail properties like neighbourhood shopping centres continue to be highly sought-after assets. They often meet the criteria that sophisticated investors and syndicates seek—long remaining lease terms, non-discretionary tenancy mix backed by strong lease covenants, and sound locational attributes. Despite the recent interest rate rises, prospective buyers, especially from the eastern states, remain focused on the length of lease terms, rental growth prospects, and depreciation benefits.
WA Property Market – Looking Ahead
Looking ahead, the WA property market is positioned well for stability and certainty. Economic factors and returning confidence bodes well for the continual growth of both residential and retail property sectors. Although market dynamics may fluctuate, the fundamentals provide a promising outlook for individuals and entrepreneurs eager to engage with the WA property market.
The McKinley Plowman Finance team can help you optimise your existing home loan through a loan review and refinancing if required, as well as connect you with our fantastic network of property professionals. So, whether you’re starting out in property investment in WA, growing your existing portfolio, looking for your first home, or it’s time to downsize – we can assist. You can reach us on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.
Data From: HTW Month in Review September 2023
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