Strong population growth keeps demand in the state high
The recent increase in the RBA's interest rates is not expected to have a significant impact on the WA established homes market, according to the Real Estate Institute of Western Australia.
“While this is unwelcome news for mortgage holders, interest rates are only one factor that affect a property market and WA’s market is being supported by a range of factors, including population growth, a strong economy and low unemployment,” said REIWA CEO Cath Hart (pictured above).
Hart said that population growth naturally drives the demand for property, while other favourable factors bolster the ability to purchase real estate.
“And while demand has seen property prices rise this year, WA remains one of the most affordable places to buy in the country,” Hart said. “Our comparably affordable house prices, higher than average incomes and lower than average mortgages, mean it is easier for people to buy and service a mortgage here, despite interest rate rises.”
Hart said that the appetite for established properties in WA is expected to persist, as indicators point to continuous strong population growth. As the population expands, more people are seeking housing solutions within the established homes market, REIWA said.
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However, Hart said that immediate relief is unlikely in the building industry or rental market.
“While the decline in the number of properties in the rental market appears to have stabilised, it is not increasing,” she said. “Local investors are still selling and although eastern states investors are showing a lot of interest in our market, they seem to simply be replacing those who have left.”
Additionally, the number of building completions in WA has not seen a substantial increase, REIWA reported. Over the past three financial years, the state has averaged 14,000 new dwellings annually, while the number of households has grown by approximately 60,000 during the same period.
The persistent constraints in the rental market and building industry are likely to drive more people towards buying established homes instead of building or searching for rentals, Hart said.
