Category: Market Update

We are coming towards the end of the year. So, what is happening right now and what can you expect for the next couple of months and into 2023?

The question that keeps popping up is the effect of the interest rate rises that we have experienced over the last couple of months. I believe we are going to receive another interest rate rise, but I actually don’t think, it’s going to make much of a difference. This is why.

1. The property prices has gone up since January and though they have taken a small step backwards in the past quarter but less than a percent. 

What I am experiencing when selling homes and talking to buyers is that they’re still out there in force. They are still heaps of people looking to buy, but when there used to be maybe six offers on a property you might only looking at four or five now. So, it’s still a sellers market. Interesting enough, there’s a lot of investors buying, and some of them are interstate or overseas. And in the last couple of months, we’ve received a number of offers on properties from interstate and overseas purchases. They love Perth because the rental return is really strong and the median house price is the lowest of any of the capital cities. 

2) The first home buyers who are also very active in the market, are now getting competition from the investors. The first home buyers are active because they can’t find a rental. And if they find a rental, the rent is pretty high. In some cases, getting a mortgage is actually cheaper than renting. So, the market is strong from a seller’s point of view, and we are 30% under a balanced market. 

So, who’s selling now? 

There are a lot of investors who are starting to sell their investment properties. They’re cashing in on their asset. They’re doing that because even though the rental market is good, the selling market is even better, because there’s hardly anything for sale. And quite often we receive multiple offers on properties. Another reason why a lot of investors are coming to me to sell their properties is because their fixed interest rate is about to go up. So, in some cases, they’re looking at having to pay the double the amount. The other market that is still very strong is your family homes. People trade up, people are downsizing, and that’s never gonna change. Some people, unfortunately are getting divorced. 

The market right now is as strong as it was earlier the year. We have seen, price increases throughout the year. So, early 2023 looks like a good time to list your property for sale and cash in. As always, the value of your home depends on a number of factors, What the condition it is in, the location, the size. 

If you’d like to know what your property might be worth in the current market or even your investment property is worth in the current market, do get in touch. 

What is your home worth?

Would you like to know what your Perth property (home or investment) is worth?

Whether for planning, financial management, an additional mortgage or just peace of mind, decisions made with anything less than the facts can lead you to make choices that may not be in your best interests.

We can provide you with the facts to calculate an accurate assessment of equity available in your property for a new purchase, upgrade, downsize or investment.

We are coming towards the end of the year. So, what is happening right now and what can you expect for the next couple of months and into 2023? 

The question that keeps popping up is the effect of the interest rate rises that we have experienced over the last couple of months. I believe we are going to receive another interest rate rise, but I actually don’t think, it’s going to make much of a difference. This is why.

1. The property prices has gone up since January and though they have taken a small step backwards in the past quarter but less than a percent. 

What I am experiencing when selling homes and talking to buyers is that they’re still out there in force. They are still heaps of people looking to buy, but when there used to be maybe six offers on a property you might only looking at four or five now. So, it’s still a sellers market. Interesting enough, there’s a lot of investors buying, and some of them are interstate or overseas. And in the last couple of months, we’ve received a number of offers on properties from interstate and overseas purchases. They love Perth because the rental return is really strong and the median house price is the lowest of any of the capital cities. 

2) The first home buyers who are also very active in the market, are now getting competition from the investors. The first home buyers are active because they can’t find a rental. And if they find a rental, the rent is pretty high. In some cases, getting a mortgage is actually cheaper than renting. So, the market is strong from a seller’s point of view, and we are 30% under a balanced market. 

So, who’s selling now? 

There are a lot of investors who are starting to sell their investment properties. They’re cashing in on their asset. They’re doing that because even though the rental market is good, the selling market is even better, because there’s hardly anything for sale. And quite often we receive multiple offers on properties. Another reason why a lot of investors are coming to me to sell their properties is because their fixed interest rate is about to go up. So, in some cases, they’re looking at having to pay the double the amount. The other market that is still very strong is your family homes. People trade up, people are downsizing, and that’s never gonna change. Some people, unfortunately are getting divorced. 

The market right now is as strong as it was earlier the year. We have seen, price increases throughout the year. So, early 2023 looks like a good time to list your property for sale and cash in. As always, the value of your home depends on a number of factors, What the condition it is in, the location, the size. 

If you’d like to know what your property might be worth in the current market or even your investment property is worth in the current market, do get in touch. 

In this month’s update, I discuss why the Perth Property Market may not really be all doom and gloom.

In fact, Perth’s property market is abuzz with owner occupiers and investors.

Due to the low rental vacancy rate of 1.1 per cent and the low unemployment rate, the Perth market should remain strong for the foreseeable future.

As 2022 approaches its midway point, uncertainty persists as politicians and regulators face an economic future that is intimidating – at best. Further, rising inflation is looming as a threat and fast becoming the hallmark of household and business decision-making. 

To combat spiralling inflation, the RBA signalled its intention to keep raising interest rates in 2022. Annual inflation reached 6.1% in the June quarter. 

However, in a recent presentation, RBA Deputy Governor Michele Bullock urged borrowers not to panic. According to Ms. Bullock, savings would protect many households from short-term rate increases.

Not too stressed in the West

Western Australia has experienced unprecedented migration in recent months and remains one of the most affordable places in the country to buy a home. According to the ABS, over 13,000 people migrated west in the final months of 2021, making it the largest migration in Western Australian history. 

Why? Because of lower median house prices and the strength of the property market. 

According to Real Estate Institute Australia (REIA), Perth had the most affordable housing sale price of $525,750 out of all capital cities in the March 2022 quarter.

Even as interest rates rise, many investors and homebuyers seem to be looking for property in the Perth area. Well-priced inner city properties will continue to sell quickly, but we’ll see the first shift in the mortgage belt areas, typically on the outskirts of Perth.

First-time purchasers made up 38.5% of the WA owner-occupier market. This is the highest percentage of any state in the nation, according to REIA. 

State of the market

Perth house prices increased by 0.4 per cent in June, marking it the second month that the rate of capital gain has decreased.

The Housing Affordability Report from REIA has indicated that WA remains the 2nd most affordable state in Australia to buy property, just behind the Northern Territory. 

The slowdown comes after a brief rebound in Perth’s growth rate, which coincided with the reopening of state borders. However, it appears that the Perth market is losing steam along with the national trend.

With buying activity appearing to be high and advertised property stock remaining exceptionally low, selling conditions appear to be steady across the Perth market.

Houses typically sell in 18 days, which supports this; yet, such a quick turnaround has happened because discounting rates have risen.

Perth property predictions for August 2022

With further interest rate hikes expected after the RBA increased the cash rate by half a percentage point to 1.85%, things could get slightly worse before they get better. 

The ANZ predicts an interest rate as high as 3.35 per cent by the end of 2022. Their Head of Economics, David Plank, is optimistic that this won’t mean a hard landing for the economy because of the continuing low unemployment rate and increased wages. 

Closing Thoughts 

There you have it! Perth’s property market is sound even with more predicted interest rate hikes. 

However, due to the widespread popularity of fixed-interest mortgages post-pandemic, continued rate increases pose a significant risk for the real estate industry. We will have to wait and see how this affects fixed-interest borrowers currently protected from rate increases. 

The best way to navigate these uncertain times is to speak to an independent professional who understands their location.

The Haus Exchange will continue to monitor the economy’s state and provide timely updates on how it affects the Perth real estate market.

Want to Learn More about the Perth property market?

Are you thinking of making a move in the next 6-12 months or would you simply like to know where you are at? If yes, click here to learn more

Australia has seen many changes in the past month. A new Labour government was voted into power on 21 May 2022, and the RBA raised the cash rate to its highest level in decades with an increase of 50 basis points to 0.85%.

In this update, I look at Labour’s five-point housing and economic plan and what it means for homeowners. Lastly, I explore Perth’s property market predictions for the coming months with an emphasis on rising cash rates likely to continue well into 2023. 

Watch the Perth Market update in 58 seconds including why this winter could be the ideal time to sell and the really easy way that Buyers can get ahead in this market.

For a more detailed market update, please see below.

Share market in decline

The recent rise in inflation has seen the RBA hike cash rates to higher than expected levels. Global market shares are dropping since consumers face price increases from every direction while growing concerns of a recession due to geopolitical unrest.

So, what does this mean for Perth’s housing market?  

Last week, REIWA members reported 869 property sales in Perth, a decline of 12.8% from the previous week. This is due to an 11% drop in home sales, a 17% drop in unit sales, and a 16.8% drop in vacant land sales.

While federal elections have historically slowed activity as consumers wait for the results, numerous interest rate hikes are on the horizon, which also appears to be affecting buyer attitudes.

Conditions have changed since 2021. REIWA reports that housing sales have decreased steadily from December 2021 to May 2022. However, unlike large cities on the east coast, Perth is still experiencing growth. 

Perth is currently the most affordable state capital, with a median dwelling value of $555,500, making it attractive for buyers. Although there is a decline in owner-occupier demand, investors with new funds and equity may look to acquire properties and benefit from low vacancy rates and rental price growth. 

Although further rate hikes are expected, Perth’s housing market should see moderate growth over the next while.

The Labour government’s proposed housing and economic policy 

Australia’s new federal treasurer, Jim Chalmers, warns of tough times ahead as he notes the previous government, led by Scott Morrison, has left him in a dire situation. 

“There are elements of strong demand, tight labour market, there are some pleasing aspects of the national accounts, but there are far more troubling aspects in our economy,” said Chalmers.

That being said, more social housing was promised by Labour, as well as a strategy of helping 10,000 Australians each year through a 40 percent equity contribution.

Both policies can potentially increase demand in a housing market that is already oversaturated. However, recent data suggests that Australia’s housing boom may be about to an end, with national prices dipping in May for the first time since 2020, as higher interest rates put pressure on buyers.

ANZ chief economist, Shane Oliver, notes that Australia’s property market is “highly sensitive” to changes in the monetary cycle due to high debt to income ratios. 

Maintaining economic growth amid rising global tensions and inflation while addressing calls for higher spending from freshly appointed lawmakers will be difficult for the incoming government.

Perth property predictions for July 2022

Bloomberg reports that 79% of economists predict a further rise of 50 basis points in July, which sets the cash rate at 1.35%. This should come as no surprise following a 75 basis point hike by the United States Federal Reserve on 16 June 2022. 

The rise in cash rate indicates a further slow in growth in July for Perth’s property market.

Concluding thoughts

Haus Exchange will continue to assess the economy’s performance and bring you regular updates on how it affects the Perth property market.

If you’re considering buying a property, I advise you to make sure your finances are in order so that you can move quickly to avoid rising interest rates. 

With the year fast coming to an end, the market is taking an unexpected turn. To get up to speed with the Perth Property Market with why some properties are selling extremely quickly while others are not moving at all please click on the video below.

Your update will only take you 62 seconds.

(for subtitles/captions please click cc on the screen). 

Complimentary Stage and Styling – 2021

The Haus Concierge Service is super busy and we are only just keeping up with the demand for our staging and styling service that is complimentary to all of our clients and which ensures that all of our properties sell!

If you would like your home or investment property staged and styled for quarter 1 2021, then please get in touch ASAP to avoid missing out.

How this couple smashed their reserve.

How is your property value tracking in this shifting market?

Why guess when you can just ask us for a Digital Appraisal of your home or investment property. If it’s been on your mind, but you haven’t had the chance to arrange an appraisal or you would prefer to let your tenants have their privacy, this is your chance to stay informed without the hassle.

Simply get in touch with the property address and a brief description so that I can send you an estimated value based on similar homes sale over the past 12 months.

This report costs nothing and is totally obligation-free, so why wait? Simply get in touch and I will send you the report including market research and comparative market sales within 24 hours.