Look­ing to build on past year

Fremantle Gazette - - RESIDENTIAL -

FINBAR goes into 2019 with a def­i­nite sense of pos­i­tiv­ity about the Perth apart­ment mar­ket on the back of strong sales across our projects in the last quar­ter of 2018.

The sen­ti­ment is far more pos­i­tive than it was at the end of both 2016 and 2017 and I think we can now safely say that the bot­tom of the Perth mar­ket is well and truly be­hind us.

The de­vel­op­ers who re­mained in the Perth mar­ket af­ter a tough few years will ben­e­fit from the tight­en­ing of sup­ply, which will ul­ti­mately have a pos­i­tive ef­fect on pric­ing.

The resur­gence of ac­tiv­ity in the re­source sec­tor is al­ways mir­rored with an up­swing in ac­tiv­ity in the Perth prop­erty mar­ket and we are see­ing strong signs of re­cov­ery in terms of sales ac­tiv­ity across our projects that re­flects this.

If you put that against a back­drop of strong eco­nomic re­cov­ery na­tion­ally, with a tipped re­turn to sur­plus this year and the re­align­ment of the GST back in WA’s favour, you have all the in­gre­di­ents for a re­turn to stronger mar­ket con­di­tions.

In­vestors re­mained the miss­ing piece in 2018, but pru­dent in­vestors are re­turn­ing to the mar­ket and we ex­pect a fur­ther up­swing in in­vestor ac­tiv­ity. THE WA prop­erty mar­ket should re­main sta­ble this year, with some notable im­prove­ments ex­pected in the Perth rental mar­ket.

While sales ac­tiv­ity in 2019 is ex­pected to largely re­flect what we saw in 2018, there is a pos­si­bil­ity that ris­ing con­sumer con­fi­dence lev­els, cou­pled with im­proved hous­ing af­ford­abil­ity, could trans­late to in­creased sales vol­umes.

If sales re­main at 2018 lev­els or bet­ter (about 500 per week), Perth’s me­dian house price could im­prove dur­ing the next 12 months.

How­ever, if lend­ing stan­dards tighten, this could re­strict the num­ber of peo­ple able to buy, which could neg­a­tively im­pact sales and prices.

If banks in­crease in­ter­est rates any fur­ther, this also has the po­ten­tial to ad­versely af­fect buy­ing and lend­ing con­di­tions in WA

The Perth rental mar­ket led the way in 2018, with sta­ble rents, healthy leas­ing ac­tiv­ity lev­els, de­clin­ing list­ings and a plum­met­ing va­cancy rate.

The up­ward tra­jec­tory should con­tinue in 2019, with sta­ble pop­u­la­tion growth and slow­ing con­struc­tion lev­els key driv­ers for this im­prove­ment.

Com­pe­ti­tion among ten­ants should in­crease, putting down­ward pres­sure on the va­cancy rate.

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