Perth median set to rocket in perfect storm
Western Australia’s booming economy, the housing supply shortage and opening borders will all contribute to a median home price boost to above $600,000 by the end of 2022, according to Nu Wealth Managing Director Daniel McQuillan.
Helped along by a falling unemployment rate – dropping 0.4 per cent to 4.1 per cent last month – Mr McQuillan said demand for housing was set to continue rising along with population figures.
“This low unemployment rate is resulting in a skills shortage across a wide range of industries,” he said. “The Chamber of Commerce and Industry WA estimates that the state needs an additional 55,000 workers to fill the labour shortfall in Western Australia.”
Mr McQuillan said a large influx of skilled workers was expected to hit WA during the beginning of 2022, at a time when there was an undersupply of housing.
“The housing shortage in Perth is underlined by the fact that there are only around 2000 properties available for rent and just over 8000 properties listed for sale,” he said.
“This influx of workers into Perth during this housing shortage will have a big impact on prices.”
Major impacts to housing prices in WA are already well underway, with the latest CoreLogic figures showing the median house price in Perth jumped to $524,589 during September 2021 – marking an 18.5 per cent jump over the past 12 months.
Despite this, Mr McQuillan said property prices in Perth were still amongst the most affordable of any capital city in Australia.
“Growth in the median Perth house price of at least 15 per cent over the coming 15 months to the end of 2022 is very achievable, which would bring the median Perth home price to just over $600,000,” he said.
“This median home price would bring Perth into line with Brisbane and would still be over $400,000 lower than Sydney if neither of those cities recorded any further price rises over the next 14 months.
“Nu Wealth believes all of the underlying economic fundamentals point to Perth achieving a median home price of $600,000 by at least the end of 2022.”
Mr McQuillan said investors were driving the price growth due to the high rental returns the Perth market was currently achieving. “In many areas of Perth, investors are achieving rental returns in excess of five per cent at a time of record low borrowing costs,” he said.
“Nu Wealth is recording growing interest from both first-time investors as well as investors from the eastern states in the Perth property market because of the shortage of housing in the city. In particular, the next 14 months should see a big influx of investors from the eastern states into the Perth market who are seeking these high rental returns as well as rising house prices to build their financial wealth."
“For astute property buyers, now is the time to buy in well-located areas in the Perth real estate market while prices still remain relatively affordable, and enjoy the capital growth that will occur over the coming 14 months.”
Original Article: https://thewest.com.au/lifestyle/real-estate/perth-median-set-to-rocket-in-perfect-storm-c-4365489