As Perth’s residential property market gets off to a strong start in 2022, our team analyse the biggest trends impacting the market in January, and what these mean for the year ahead.
Trend 1 – Investors make their return to WA market
Figures from the Australian Bureau of Statistics have revealed a significant rise in investor activity across WA’s property market, with lending to investors up 95% in the 12 months to November 2021. The market continues to offer strong growth prospects for buyers in 2022, with REIWA forecasting a further 10% rise in property values across the year, and CoreLogic’s home value index highlighting a strong start to January (+0.6%) despite the typically quieter festive period. With many owners benefiting from increased equity from the value gains recorded across 2020 and 2021, these growth conditions combined with the market’s comparative affordability continue to provide a key opportunity for investors to start or expand their property portfolio.
Trend 2 – Perth outperforming for rental yields
Strong housing affordability combined with the recent rise in median rents continue to drive an attractive rental yield offering in Perth, with the market delivering the second highest yield of all states and territories in Q4 2021 (CoreLogic Quarterly Rental Review). At 4.37%, Perth yields remain well above the combined capital average, which dropped to 2.96% across the same period. Increasing affordability pressures combined with a slowdown in rental growth have seen a significant compression of yields in the Sydney and Melbourne markets, down to 2.42% and 2.74% respectively.
Trend 3 – WA job vacancies at nine-year high
A combination of economic factors continues to support Perth’s residential property outlook. The WA economy grew 4.3% in 2020/21 – the strongest across all Australian states for the second consecutive year. This growth has driven a significant rise in job opportunities, with job vacancies jumping nearly 17% in the November quarter 2021 to reach a nine-year high. These conditions will likely attract an influx of jobseekers when interstate and international migration resumes, further boosting housing demand.
Trend 4 – Low supply and high demand for Perth’s premium apartment markets
Industry forecasts have predicted a renewed focus on the Perth apartment market from both interstate and overseas buyers in 2022, as Perth’s median unit price remains the most affordable of all capital city markets in Australia. The limited availability of new quality apartment supply in 2022 continues to drive demand for available stock, particularly in Perth’s sought-after western suburbs which remain a key target for owner-occupier and downsizer demographics.