Property sales in Perth have reached levels not seen since 2010 thanks to strong buyer demand.
In April, the median time to sell homes was 13 days, while listing volume was 1% higher than in March and 11% lower than in April of last year.
Mack Hall Sales Real Estate, in association with Knight Frank Executive Greg Williams, said high sales volume and low property listings will lead to continued supply shortages, which have driven the market since late 2020.
“Low supply and steady demand means happy sellers,” he said.
“Right now, real estate is a much more liquid asset than it normally is, so buyers need to make decisions quickly so they don’t miss out.”
REIWA Chairman Damian Collins said the market is all about supply and demand.
“A balanced market is around 12,000 to 13,000 properties available for sale across Perth,” he said.
“Right now we’re sitting around 8,000 properties, which fluctuates slightly from week to week.
“There simply aren’t enough properties available to meet market demand.”
Despite the low number of properties available, Mr Collins said sales volumes were on the rise and were steadily reaching around 1,000 properties per week.
“These are pretty solid numbers,” he said.
“In 2018 and 2019, it was regularly 600 goods per week, there is little stock available.
“As soon as something good hits the market, it sells very quickly.”
Western Australia has high employment rates, with data from the Australian Bureau of Statistics showing the unemployment rate is at an all-time high of 2.9%. This, combined with strong economic growth and relatively low interest rates, has led to an increase in demand.
Mr Williams said sales volume would continue to rise depending on macroeconomic drivers on the demand side of the equation.
“If demand remains strong, sales volumes should continue to be strong,” he said.
“Uncertainty surrounding political stability and interest rates can alter demand.”
Mr Collins said interest rates had not dampened the market.
“Agents I’ve spoken to have reported that demand is higher because people want to get a property locked up before rates get too high,” he said.
Another contributing factor that may boost demand is the opening of borders and easing of restrictions, following WA’s long stint cut off from the world at the height of the COVID-19 pandemic.
“At some point this year we will start to see more migrants coming to seek employment,” Mr Collins said.
“Although it will be more difficult to bring people here than before, this population growth will continue to fuel demand.”
According to Mr Collins, WA is the cheapest state in the country for housing – around 25-30% less than Brisbane and Melbourne, and 15% less than Adelaide.
“Our national body does affordability studies, and the latest report says that in WA, on average, 26.2% of income is spent on a mortgage,” he said.
“In New South Wales it’s over 44 per cent, so we were the cheapest of all the big states.”
Mr. Collins said REIWA expects prices to continue to rise over the rest of the year.
“We are forecasting 10% growth for calendar year 2022, and that appears to be on track,” he said.
Mr Williams said most commentary on interest rates focused on household debt-to-income ratio levels on the east coast, which was different from WA.
“Not all buyers take this into account, most are slightly cautious,” he said.
“Even after the recent increase, the Reserve Bank of Australia cash rate is a tiny 0.35 per cent.
“When rates adjust slowly, it will only be towards normal from almost non-existent.
“It would be a worse sign if the economy needed rates this low forever. I would rather see signs of inflation than deflation any day.
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