Perth tipped by industry leaders to defy national property downturn...
Some of Perth's most prominent property industry figures have forecast that the Western Australian capital will continue to defy the national property price downturn despite the impact of interest rate hikes and other headwinds.
Driven by population growth, strong economic fundamentals and limited supply, as well as ongoing affordability, the greenfield land market and detached housing market were singled out as having the best prospects by REIWA CEO Cath Hart, David Cresp, Director of Urbis, and Colin Keane, Director, Research4.
WA is enjoying an especially strong labour market with very low unemployment (3.2 per cent), however certain highlighted property market metrics are pointing to a general market activity moderation, including new dwelling approvals (down 8 per cent year-on-year) and monthly land sales in July down 19 per cent on June.
The return to a normalised level of population growth, including from new arrivals from overseas, will be a critically important to the forward demand profile for WA’s new housing market.
The latest ABS data on permanent arrivals to Australia shows a very positive direction in this regard, with 26,340 new arrivals recorded in the June quarter 2022 and 23,730 arrivals in the March quarter - both at levels above the pre-Covid period of around 22,000.
Researcher Colin Keane said the last two years have been influenced by factors that are non-local.
“They've been impacted by factors from at a global level but we have now exited that phase.
“And as the greenfield market is now going back to its new normal, that new normal is much better than pre-pandemic.
“You have higher levels of demand by 30 to 40 per cent for land, and you have still record low prices on Perth land, therefore they should not really go backwards, they should go forward.
“So, there is a strong opportunity for the Perth market to leverage those attributes and see a very relatively successful next two years.”
Mr Keane forecast further price growth for Perth greenfield sites.