The West Australian capital’s property prices are expected to climb by up to 15 per cent this year, according to SQM Research
One major metropolis in Australia that didn’t perform particularly well in 2020 is expected to be the strongest capital city housing market in 2021. Perth was last year the second worst state or territory capital and house prices are still well below the peak of 2014.
Despite that, SQM Research is expecting the West Australian capital’s property prices to surge by up to 15 per cent this year.
That is based on a scenario where the Covid vaccine roll-out in the first half of 2021 went better than expected, employment boomed as JobKeeper wage subsidies were phased out and state border closures ended.
SQM Research managing director Louis Christopher said stronger prices for iron ore, the commodity used to make steel, meant Perth would benefit economically more than any other capital city market this year.
Arguably, Perth’s economy overall is more coronavirus-proof than other capital cities, his report said.
Perth also has a tight rental vacancy rate of just 0.9 per cent which Mr Christopher forecast would feed into house price increases, even if that didn’t happen in 2020.
It has been a little surprising to see such a surge in rents and yet it has not yet properly transferred into a new housing boom, SQM Research said. Given the no vacancy sign is now out, it is likely we will see an accelerated rise in housing prices as frustrated renters turn to buyers.
In 2020, Perth property prices rose by just two per cent with median house prices edging up to $490,810, CoreLogic data showed, but a 15 per cent increase would take values to $564,431.
Only Melbourne did worse with home values there falling by 1.3 per cent, taking mid-point house price back to $799,980, as Sydney prices rose by 2.7 per cent to $1.015million, even though both markets suffered consecutive monthly falls.
The story was very different outside of Australia’s big cities with property prices last year hitting record highs in 39 out of Australia’s 88 regions despite the worst economic downturn since the 1930s Great Depression.
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