The Western Australian property market has been a topic of interest with recent trends and observations making it a focal point for both industry experts, potential homeowners, and investors. We spoke to Drew Cary, Elders Real Estate Manager WA, to provide insights into the intricacies of the regional market to help clarify the underlying phenomena driving its current state.
“The regional areas of Western Australia are experiencing a unique phenomenon,” Drew noted. This isn’t limited to just one region; the story remains consistent from Bunbury and the Southwest to Geraldton and the Midwest, or down to Albany and Esperance. On the surface, the number of listings entering the marketplace aligns with a five-year trend, suggesting a balanced market. However, Mr Cary points out that a deeper look into the data reveals a different narrative. Despite the influx of new listings, the overall stock is dwindling, as agencies are holding on to about half of what is typically expected during this period. “Simply put, properties are being sold faster than they are being listed,” Drew explains. The average days on market are sitting at just 19 and have trended downwards significantly from 5 years ago.
The primary driver behind this surge in demand is population growth. Western Australia is witnessing an influx of both interstate and international arrivals, not seen in the last 15-20 years. In the last quarter alone, 15,000 people arrived in WA. This surge, combined with a lag in new constructions and a tight rental market, is creating a significant demand for housing.
With the demand clearly exceeding supply, Drew acknowledges that property prices in WA are seeing an annualized increase between 10% and 15%. Such significant price hikes haven’t been observed in many years and are a direct result of the underlying demand stripping available stock.
“The WA regional rental market is now tighter than ever,” Drew states. With a vacancy rate of just 0.5%, there’s a clear shortage of available rental properties. This shortage can be attributed to a gap between the number of investors buying and selling properties. For the past three to four years, more investors have been selling properties than buying, leading to a steady decline in available rental stock.
Drew reflects on the challenging situation the WA property market faces. While listings are flowing in at regular rates, the demand, driven by population growth and a tight rental market, is depleting available stock at an unprecedented rate. This in turn is creating anxiety for sellers and renters wanting to list or move, as they struggle to obtain the necessary assurances of where their next home will be. As for what the future holds only time will tell, but if the current trend continues, we will see the WA property market struggling to meet demand with the inevitable social and pricing consequences that follow. Drew advises the best way to navigate the current market is to rely on your local Elders agent, who is best placed to provide advice and guidance.