From doom to boom

Eastern Reporter Bayswater & Bassendean - - RESIDENTIA­L - Natalie Hor­dov

AF­TER pre­dict­ing a large 10 per cent fall in na­tional prop­erty prices from the peak in April 2020 to June 2021, West­pac has re­vised its forecast to a more mod­er­ate 5 per cent, with prices then “surg­ing” 15 per cent un­til mid-2023.

Af­ter lan­guish­ing in the dol­drums since 2014, Perth is one of the mar­kets set to lead the re­cov­ery with a growth rate of 18 per cent pre­dicted.

Reiwa pres­i­dent Damian Collins said with low in­ter­est rates, record-high hous­ing af­ford­abil­ity and a short­age of prop­erty, price growth in Perth was quite fore­see­able.

“It won’t be ex­ces­sive, but I wouldn’t be sur­prised if we got 3-5 per cent be­tween now and June/July 2021,” he said.

West­pac chief econ­o­mist Bill Evans said the na­tional re­cov­ery would be sup­ported by sus­tained low rates — which were likely to be even lower than current lev­els — on­go­ing sup­port from reg­u­la­tors, sub­stan­tially im­proved af­ford­abil­ity, sus­tained fis­cal sup­port from both Fed­eral and State gov­ern­ments, and a strength­en­ing eco­nomic re­cov­ery, par­tic­u­larly once a vac­cine be­comes avail­able, which West­pac ex­pects in 2021.

Mr Collins said pop­u­la­tion growth would also boost the Perth mar­ket, par­tic­u­larly with peo­ple re­turn­ing to WA from over­seas need­ing hous­ing.

“The WA gov­ern­ment has been asked to take in another 500 peo­ple per week and while not all of them will stay in WA, we will also have Western Aus­tralians com­ing back from over east, and I’m not sure where they’re go­ing to be housed,” he said.

“We al­ready have a mas­sive rental short­age, a short­age of houses avail­able for sale and we’ve been build­ing very low num­bers of prop­er­ties over the last three or four years; while the build­ing grants have been help­ful in get­ting new supply, most of it has been used by first-home buy­ers in the out­skirts, not nearly enough has been used in in­fill ar­eas.

“We’re go­ing to see a re­ally chal­leng­ing en­vi­ron­ment where de­mand will out­strip supply and we would ex­pect to see price growth.”

Un­der these con­di­tions, Mr Collins said West­pac’s 18 per cent forecast over the next three years was pos­si­ble, but per­haps not as ex­cit­ing as it sounded. “You’ve got to re­mem­ber we’re down 20 per cent or more from the highs five years ago, so even an 18 per cent rise is go­ing to be strug­gling to get us back to where we were,” Mr Collins said.

“It’s al­ways hard to pre­dict the fu­ture with any cer­tainty, but given where we sit at the mo­ment, if we con­tinue to get pop­u­la­tion growth, the min­ing sec­tor re­mains strong and we re­main rel­a­tively free of COVID, then it’s cer­tainly in the realms of pos­si­bil­ity.”

The rental short­age re­cently saw more than 30 ren­ters lining up to in­spect a va­cant apart­ment in the NV Build­ing on Mur­ray Street, Perth.

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