WA Property Market Update – February 2021
Plenty has been said about 2020 up to this point – and with a year so difficult it’s not hard to see why. As we’ve done plenty of “taking stock” in our last few articles, for the February WA property market update we’ll put a bit more emphasis on looking ahead.
As consumer confidence continues to rise, primarily off the back of WA’s relatively successful COVID-19 defence, the knock-on effect to the residential and commercial markets is really starting to show – and for the most part, the conversation around WA’s uptick in fortunes in the property market seems more a question of “when” rather than “if”.
Commercial Property Market Update February 2021
In previous instalments of the WA property market update, we’ve covered commercial property with more of a view towards warehouses, industrial and manufacturing premises. This time around, the office market is worth a look. As expected, COVID-19 brought about a level of uncertainty that meant lease and transaction activity in WA essentially ground to a halt. The office vacancy rate in Perth climbed to a staggering 18.4% overall, with West Perth in particular peaking at 22%. The mass roll-out of working from home policies across many businesses has also had an impact, with less demand for office space as a result.
As the last of the Government assistance schemes continue to prop up some businesses, the instability of the previous 12 months certainly hasn’t gone away yet. Until the vast majority of businesses are able to stand on their own two feet, it is apparent that most commercial investors are unwilling to open up their wallets at this stage. There is something to be said for businesses upgrading to larger premises and taking advantage of the high vacancy rates and downward pressure on prices, but this certainly isn’t the case across the board.
Residential Property Market Update February 2021
The WA residential property market has seemingly returned in 2021 with a vengeance. After several years languishing at the bottom of the national property cycle, the combination of high demand, low stock and low interest rates has caused a significant reduction in median days on the market. The resources sector continues to perform well, further increasing confidence, and a predicted State surplus and positive net migration also factor into the residential market’s sharp return to form.
Prospective investors are in a great position now to take advantage of these property prices and low interest rates, and a critically low vacancy rate of 0.8% for rental properties – an opportune time to get into the investment game. The boom in land sales off the back of generous State and Federal Government incentives has seen previously over-supplied land estates now selling out, with developers looking to fast-track new developments to meet demand. A longer-term price correction for land sales is possible if developers once again over-supply the market, which would then place downward pressure on prices.
For residential property, the future looks bright. Those looking to buy or invest are in an excellent position to take advantage of the current situation. Renters will continue to face a tough time for the foreseeable future – while stock remains low and demand remains high, prices will only go up. As for commercial spaces, an opportunity is there for growing businesses to upgrade their premises, however such examples may be few and far between.
Are you looking to buy, invest or refinance? The Finance and Property team at McKinley Plowman are here to assist, with access to over 30 lenders and more than 20 years’ experience. Get in touch with us today via our website or call us on 08 9301 2200 (Joondalup) or 08 9361 3300 (Victoria Park). We hope you enjoyed reading the WA Property Market Update for February 2021.
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