A new index has found conditions in the Western Australian capital city are the best they’ve ever been for the last five years.
The latest quarterly edition of the Buy-Rent Index, a collaboration between the Real Estate Institute of Western Australia and Curtin University, has found that property is very affordable for buyers.
In fact, a median house price of 2.9 per cent annually over 10 years would mean Perth houses would be more financially viable to purchase than to rent.
Damian Collins, president of the RIEWA, said the current mix of affordable house prices and median rents mean buyers have power in the Perth market.
“With Landgate data showing Perth’s median house price is the most affordable it’s been in six years and reiwa.com data showing Perth’s median house rent increased by $10 per week during the September 2018 quarter, the latest Buy-Rent Index has shifted more heavily in favour of buying,” Mr Collins said.
“Another contributing factor to the improvement in affordability is declining mortgage rates, with the 10-year average having dropped from 7.3 per cent (1998 – 2008) to 6.2 per cent during the last decade (2008–2018).
“The current Perth median house price would only have to increase to $658,000 by 2028 to be considered more financially advantageous than renting. This bodes very well for Perth buyers, considering the 15-year annual average house price growth rate is 5.1 per cent.”
According to J-Han Ho, property researcher and senior lecturer in the School of Economics, Finance and Property at Curtin University, the data indicated the near future indicated a positive outlook for the Western Australian market.
“Perth’s housing market is very attractive when you consider the cost of housing, distance from the CBD or major activity centres, housing quality and size, and amenities available in every precinct,” Mr Ho said.
“The state government’s international education strategy and graduate skilled migration list that was introduced in 2018, along with changes to immigration policies by both state and federal government in 2019, could be the catalyst for an increase in demand for housing.
“Planned mining investments and retail centre developments should also help to improve employment figures and consumer confidence in WA.”