One Australian state is bucking real estate trend as house prices fall due to rising interest rates
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The Australian state bucks the property trend as house prices fall across the country due to rising interest rates and cost of living pressures.
- WA seems to be diverging from the national trend of falling house prices
- Real Estate Institute of Western Australia predicts growth of two to five percent
- REIWA also anticipates higher sales rates in the low to mid price brackets.
An Australian state is braving a national downturn in the housing market brought on by rising interest rates, cost-of-living pressures and housing shortages.
The Real Estate Institute of Western Australia remains positive on its 2023 outlook, predicting moderate two to five per cent growth in house prices in Perth over the next 12 months.
“Longer term, as prices fall, interest rates stabilize and wages rise, we expect market conditions to improve,” PropTrack director of economic research Cameron Kusher said.
Western Australia appears to be bucking a national trend of falling house prices fueled by rising interest rates, cost of living pressures and housing shortages (a house for sale in Sydney pictured)
“Hopefully, we’ll also see more investors come back to the market, creating more rental supply.”
According to CoreLogic research, house prices in the rest of the country by the end of 2022 were weaker, with an overall 5.2% drop in property values.
CoreLogic research director Tim Lawless said capital city values fell sharply after the first four months of last year, when the RBA began the fastest rate-tightening cycle on record.
“Our daily index series recorded a spike in national home values on May 7, shortly after the cash rate moved away from emergency lows,” Mr. Lawless said.
“Since then, the CoreLogic National Index has fallen 8.2 percent after a spectacular 28.9 percent rise in values during the bull run.”
However, the same data shows that Perth ended the year up 3.6 percent, with a 5.7 percent increase for the WA regional areas.
The state was second only to South Australia, with Adelaide and the metropolitan areas enjoying 10.1 per cent growth and regional SA posting a whopping 17.1 per cent increase in property values.
REIWA chief executive Cath Hart said expected price growth for Perth this year will be supported by weak supply and strong demand, although quotations remain low.
The Real Estate Institute of Western Australia, REIWA (pictured), predicts housing in WA will grow by between two and five per cent over the next 12 months with high demand for few homes.
“Current listing levels are 10 per cent lower than this time last year, and almost 34 per cent lower than three years ago,” said Ms Hart.
“As building completions increase over the next 12-18 months, we anticipate listings to begin to increase, however they will remain below historical averages.”
WA Property Council CEO Sandra Brewer agreed that was the projection for the post-Covid property market.
“WA has benefited from the Covid stimulus packages, with a lot of house building going on,” he said.
“But generally, there has always been a housing shortage in Perth.”
For buyers, it may be better to act sooner rather than later, as the Reserve Bank resumes interest rate decisions starting next month.
REIWA has also noted that Western Australian homes in the low to mid price ranges are expected to sell at higher rates during 2023 (pictured home auction)
Further interest rate increases could mean reduced borrowing power and cause buyers to moderate their expectations accordingly.
REIWA noted that they anticipate increased sales activity in the low to mid price brackets in 2023.
As for regional WA, Busselton outperformed last year as all regional centers experienced median price growth.
“Regional areas have also benefited from an increase in the work-from-home/micro-business trend,” said REIWA’s Cath Hart.
“The idea of having to live where you work has changed significantly after Covid.”