06 June 2018
The latest REIWA Curtin Buy-Rent Index for the March 2018 quarter has revealed it’s the best time to buy in Perth since 2013.
The Index, released quarterly, assesses whether it’s better to buy or rent in Perth based on past and current trends in the economic and property market climate.
REIWA President Hayden Groves said the March 2018 quarter index showed the annual rate of house price growth required over 10 years to break even in the Buy-Rent Index had declined from 3.3 per cent to 3.1 per cent over the quarter, suggesting an improvement for prospective homebuyers weighing up the decision.
“To put that into perspective, Perth’s annual house price growth rate has been 5.9 per cent for the last 15 years. Based on the March 2018 quarter Index, house prices in Perth would only need to grow by more than 3.1 per cent annually for buying to be considered more financially beneficial than renting,” Mr Groves said.
“This improvement in buying conditions can be attributed to the Perth median house price softening by 1.9 per cent during the March quarter, while the median house rent price increased $5 to $360 per week. We also saw the 10 year average mortgage rate drop to 6.43 per cent, which means home owners are paying less on their mortgage repayments.
“This is the most affordable buying environment we’ve seen in Perth for some time, so if you’ve been weighing up whether to buy, now is the time to take advantage of favourable market conditions,” Mr Groves said.
Mr J-Han Ho, a Property Researcher and Senior Lecturer in the School of Economics and Finance at Curtin University, said the data indicated a continued improvement for the home buyer in the near future.
“Our analysis shows home buyers gaining an advantage, largely due to the low interest rates for home loans, home ownership costs continuing to be affordable and the median rents stabilising,” Mr Ho said.
View the March 2018 quarter Buy-Rent Index.
30 January 2018
Author: REIWA President Hayden Groves via reiwa.com.au
After a solid couple of years of subdued conditions in the Perth property market, we can look back on 2017 as a transitional period that brought about the bottom of the market.
Coming off the back of a very soft 2016, the Perth property market regained its foothold in 2017, with stable listings, sales and median house price levels observed.
The stability we are now witnessing across key market indicators is a welcome change.
What to expect in 2018
The forecast for 2018 is that the Perth market will moderately and steadily improve, however REIWA cautions against expectations of rapid growth in either the established housing or rental markets over the coming year.
In 2017 there was an average of 489 property sales recorded each week, which REIWA forecasts will lift to approximately 500 sales per week over the next six months. If sales volumes continue to trend at current levels, listing volumes will begin to fall, creating upward pressure on prices as demand builds.
We saw listings for sale start to level out and decrease last year, peaking at just over 15,000 in early 2017, before reaching a low of just over 13,000 in September.
With new dwelling activity set to decline in 2018, REIWA forecasts the number of properties for sale in Perth to remain at current levels over the next year, a level commensurate with market parity.
Perth rental market
Perth’s rental market also appeared to turn a corner in 2017, with listings declining from 11,000 in January to just over 9,300 by December.
Over this same time, leasing activity levels were strong, with approximately 1,180 rentals leased each week. If this trend persists, the balance between supply and demand of stock will continue to improve in 2018.
In a welcome change for investors, Perth’s median rent price has stabilised at $350 per week since April last year. While we don’t anticipate there will be significant growth to median rent prices in 2018, they’re not likely to fall either with quality family homes in particular in strong demand.
The Perth market is no longer experiencing significant declines in median house and rent prices, nor are we seeing listings for sale and for rent increasing at the rate they once were.
As market conditions improve and confidence returns, competition among buyers will inevitably increase.
If you’re thinking about purchasing your first home, trading-up or investing in property, my advice is to act sooner rather than later and take advantage of the stable and favourable market conditions.
To discuss your valuable investment with our Business Development Manager Sarah Morgan, give us a call on 9475 9622