February has seen market confidence continue to increase as housing values slowly emerge from a five year slump. Domain predicts that the Perth market should rebound and see the fastest price growth since 2014.
Perth’s long-running downturn should come to an end in 2020. We forecast the median house and unit price to rise by 5% in 2020 then by around 4% in 2021. By the end of 2020, the median house price should be $564,000, which is still 8% below the December 2014 peak.
Stronger population growth (Western Australia’s population growth is forecast to increase to 1.5% in 2020-21), faster economic growth driven by a mining sector rebound, and a tighter rental market are all behind the turnaround. Very low interest rates and the expectation that interest rates will remain low will also be the key drivers of rising property prices in 2020.
Perth Rental Market
According to the latest reiwa.com data, Medina, Armadale and Parmelia are among the top 10 Perth suburbs for investors to keep an eye out for in 2020.
REIWA President Damian Collins said with the Perth investment property market starting to show signs of improvement, there are some great opportunities out there for investors. “Our analysis showed there are a number of suburbs that have high rental returns for investors and the properties are leasing at faster than the average time. With interest rates at record lows, many of these properties are likely to be positively geared,” Mr Collins said.
“While the suburbs in this top 10 list are not rated by their lifestyle, popularity or future growth, they have faster leasing times and high rental yield which is important to investors.” Mr Collins said. “With Perth currently the most affordable capital city in Australia and the vacancy rate at a low of 2.3%, now is the ideal opportunity for investors to get back into the Perth property market.”
Perth Sales Market
In the last month, house prices in Perth have risen 0.1% (+0.4% from last quarter) and unit prices has risen 0.3% (+0.7% over the last quarter). While Perth housing values are currently amongst the most affordable of the capital cities, there are signs of gradual improving conditions in the Perth housing market such as a decline in the average selling time of a home is (57 days last year vs 42 days now), vendor discounting has decreased from 6.6% a year ago to 5.4% and property sales have risen 6% in the last 12 months compared to the previous year.
Top selling suburbs this week North of the river: Scarborough, Yokine, Morley and Tapping.
Top selling suburbs this week South of the river: Como, Baldivis, Rockingham and Kelmscott.
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