Population growth to benefit Western Australian property market
Strong population growth in Western Australia is good news for local real estate, propelling demand for housing and further strengthening the property market.
Latest data from the Australian Bureau of Statistics shows the state’s population surged in the June 2022 quarter, up by 0.4% on the March quarter and 1.3% from the same time the previous year.
The statistics show most of WA’s population growth was driven by natural increases, rather than interstate or overseas migration in the year to June 30, 2022, but the state also recorded growth in both interstate migration and overseas migration.
Real Estate Institute of WA Chief Executive Officer Cath Hart said ongoing population growth would help maintain the stability of the property market amid interest rate uncertainty.
On Tuesday, the Reserve Bank of Australia decided to increase the cash rate by another 0.25%, marking the ninth consecutive interest rate rise since May last year.
The move takes the cash rate to 3.35% – a new 10-year high – with homeowners now hit with increases of $1000 a month on the average home loan of $500,000, and speculation the rate could continue to climb this year.
“So far, WA is weathering interest rate rises well, buoyed by our economy, jobs market and affordable housing,” Ms Hart said.
“While borrowing capacity has reduced since the RBA started lifting the cash rate in May, buyers in more affordable markets like WA do not have to adjust as much as those in more expensive markets. Buyers have been able to absorb the changes and the market is holding steady.
“The State Government expects housing demand to increase over 2022/23, underpinned by continued population growth, and this will further support property prices.”
MONT Managing Director Matthew Podesta said strong population growth would ultimately help the local property market.
“Population growth and migration are key drivers of the property market because everyone needs a place to call home,” Mr Podesta said.
“WA’s strong population growth is good news for the local real estate market as it will help drive up demand for housing and boost the economy, in general, over the long term.
“For anyone who has been contemplating the idea of selling, this should be welcome news and provide sound guidance for your decision-making, given the propensity for increased demand and extra competition to put upward pressure on prices.”