The Real Estate Institute of Western Australian has revised its growth predictions for the state’s property market, with its new forecast tipping values will rise by 15 per cent this year.
REIWA President Damian Collins said the Institute was revising its 2021 forecast following strong price growth experienced in the first three months of the year.
“CoreLogic’s Perth home value index shows prices have grown five per cent in the first three months of 2021,” Mr Collins said.
He said in November last year, REIWA had forecast prices in Western Australia would increase by “as much as 10 per cent”.
“However based on what we have seen in the first quarter of 2021, we now anticipate growth of 15 per cent by the end of the year.”
In January, Perth became Australia’s fastest-growing property market, according to CoreLogic, with a 1.6 per cent increase in values over the month.
According to Mr Collins, several factors have contributed to the strong price growth experienced so far this year.
“Western Australia is still the most affordable state in the country when comparing income to median house prices,” he said.
“The current Perth median house sale price is $495,000, which is down from the peak of $550,000 in 2014.
“We hit the bottom of the market around June last year following the COVID-19 lockdown and since then consumer confidence has returned.
“Buyers who were waiting for the bottom to hit are now eager to get into the market and take advantage of the record low interest rates.”
Mr Collins also noted there was currently a fundamental imbalance between supply and demand in the market, “with more buyers looking for property than there are houses listed for sale”.
“Buyers must act quickly and in competition with one another to secure a property, which is driving up house prices,” he said.
“When you factor all of these components in, it is a perfect storm for higher-than-expected house price growth this year.
“We need to get more homes and apartments built. Until we see supply catch up with demand, we will see prices continue to rise.”