Affordability in Perth hits a high as property prices stabilise
Housing affordability in Perth is the highest it has been in decades, marking the Western Australian capital as the most affordable of all mainland capital cities, according to Momentum Wealth’s latest research report.
Coupled with increasing signs of stabilisation in property and rental prices, this increasing affordability is set to see more buyers enter the market in the coming year, the report indicates.
Residential Property Spotlight: Perth analyses the key demand and supply factors influencing the residential property market in the Western Australian Capital.
The report suggests that the imbalance in housing demand and supply triggered by the end of the mining boom is now beginning to correct, with declining building approvals set to facilitate the absorption of excess housing stock.
It explained that the key factor of desirability for the Perth market going forward will be its relative affordability compared to other Australian capital cities, with average Perth property prices for March 2018 equivalent to those recorded in March 2010.
Whilst the proportion of investors in the Perth market sat at 25% in the March quarter 2018, which is considerably lower than the 10-year average of 30.7%, the first half of 2018 has already seen an increasing number of high net worth owner-occupiers taking advantage of increased affordability and historically low interest rates to enter more affluent markets.
As supply continues to contract off the back of the downturn, housing stock levels will begin to tighten, bringing the market back to a state of reliable house growth.
According to the research report, this trend is already arising in Perth’s highly sought after western suburbs, with high demand in these areas triggering an upward trend in property prices.
Investors looking to purchase in Perth’s recovering market will need to act fast to take advantage of affordable market conditions before increased demand and tightening supply levels place upwards pressure on property prices in surrounding areas.