What to expect from the Perth property market in 2022
The momentum of last year’s robust property market is forecast to continue in 2022, with analysts predicting prices to grow further after Western Australia’s slated February 5 border reopening.
The Real Estate Institute of WA has estimated a surge in property prices by around 10% this year – a significant rise on top of strong conditions that saw prices grow by more than 13% in 2021.
REIWA President Damian Collins said the Perth real estate market had turned a corner after several lukewarm years and he foreshadowed continuing growth in 2022 once WA opens to interstate and international arrivals.
“We anticipate another healthy year of price growth ahead, driven by an increase in migration once borders open which will sustain the demand for property in Perth,” Mr Collins said.
“Despite the strong price growth recorded in 2021, WA is still the most affordable state in the country for housing, with prices in most regions across the state yet to catch up to their 2014-15 peaks.”
Mr Collins expected the volume of listings to increase slightly as sellers seek to capitalise on strong price growth, but it was likely the number would remain below historic averages.
It comes amid community debate as to whether WA’s touted reopening deadline should be delayed as the super-infectious Omicron variant ravages the eastern states.
CoreLogic data shows that Perth experienced a 13.1% increase in prices across all dwellings in the past 12 months. House prices were boosted by 13.3% and units by 10.9%.
But CoreLogic Head of Research Tim Lawless said WA’s tight border controls may have prevented WA from achieving price gains seen in other states.
Across Australia, prices increased by 22.1% last year. Hobart saw the biggest price growth with a rise of 28.1%, closely followed by Brisbane which recorded a 27.4% rise. Perth’s growth was the lowest of all states.
“Slower conditions across the Perth housing market may be more attributable to the disruption to interstate migration caused by extended closed state borders which has had a negative impact on housing demand,” CoreLogic said in its latest Hedonic Home Value Index.
Mont Property Managing Director Matthew Podesta said the start of the new year had shown no signs of a slower property market, particularly in premium riverside properties across the City of Melville.
“The new year has brought renewed interest and lofty expectations for real estate in 2022,” Mr Podesta said. “Buyers are out in force, particularly in premium suburbs and strong competition is still pushing prices up in our areas.
“This is evidenced by recent data from REIWA that shows Applecross was the one of the best performing suburbs of Perth in December last year. The suburb recorded the largest median house sale price growth with a 6.2% rise to $1.7 million.
“I expect sustained interest in these elite suburbs, particularly once the borders reopen. More people arriving in WA will mean greater demand as the new arrivals compete to shore up quality accommodation for themselves and their families.”
However, Mr Collins said while the forecast for 2022 was overwhelmingly positive, the prospect of interest rate rises could be a stumbling block.
“Interest rate rises have the potential to slow the market in 2022,” he said. “Whilst most people are aware that interest rate rises will occur at some stage, if there are multiple interest rate rises too close together, this could reduce market activity and slow projected growth.
“It would be unlikely to derail the market entirely though. WA has some of the most affordable housing in the country and one of the strongest economies in the world. We also have very low ‘for sale’ and ‘for rent’ stock. All of these factors point to another strong year of growth.”
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