Western Australia’s resilient property market is set to enjoy a prosperous 12 months, according to Real Estate Institute of Western Australia (REIWA) CEO, Cath Hart.
Quizzed about property’s prospects in the west for 2023, Hart foresees positive outcomes, despite much publicised headwinds.
“Perth’s median house price rose 2.86 per cent to $540,000 in 2022, up from $525,000 in 2021 – this was despite the eight interest rate rises which have seen east-coast markets go into decline,” Hart said.
And with the rising cost of living a hot topic nationwide, respite can be found in WA – for locals and those seeking a sea change.
“Perth remains the most affordable capital city by median house price, and while prices have risen in the past two years, in many areas they are still below the previous peak in 2014/15.
“Perth’s forecast price growth in 2023 will be supported by ongoing low supply and strong demand,” Hart said.
Sales in Perth
Sales activity remained strong in Perth in 2022, with the average weekly reported sales figure in sitting at 895 sales – up from 870 in 2021.
“We anticipate sales volumes to remain at about this level in 2023. Current listing levels are 10 per cent lower than they were this time last year and almost 34 per cent lower than what they were three years ago.
“As building completions increase over the next 12-18 months we anticipate listings will start to increase, however they will likely remain below historic averages,” Hart said.
This comes as demand for housing in WA is expected to stay relatively strong, supported by population growth.
“Any increase in new listings will be offset by population growth,” Ms Hart said.
“WA’s population grew 1.3 per cent in the year to June 2022, and the State Government’s recent Mid-Year Budget review forecasts further growth of 1.5 percent in 2022/23.
“As more people arrive in WA, this will maintain the demand for housing and keep listings low.”
The effect of interest rates
Based on current market expectations, interest rates are anticipated to have less of an impact on the market than what is being seen in other states, Hart believes.
“WA buyers have become more cautious and price sensitive following eight consecutive interest rate increases in 2022.
“But so far, the local market is weathering interest rate changes well, supported by a strong economy, low unemployment and continued population growth.
“In addition, lower property prices than the east coast has allowed buyers and mortgage holders to absorb interest rate rises to date.
“We are closely watching what the RBA does, but we are cautiously optimistic for the outlook in WA over 2023 based on current conditions,” Hart said.
With buyers starting to adjust their expectations and budgets in response to reduced borrowing capacity, REIWA is also anticipating greater sales activity in the low-mid price brackets in 2023.