As we enter 2021 with high hopes, there are many positive signs for the Western Australian property market. Understandably, we cannot forget that there is still a global pandemic which hit us hard last year, and our economy is still dealing with what were and still are challenging times.
For our property market, 2020 was a year where improvement occurred significantly in the second half, with low vacancy rates, increasing house prices and fast selling days.
Since COVID-19, there’s been pressure on the rental market due to the lack of supply, contributing to record low vacancy rates in WA, making it an extremely difficult time for tenants trying to secure a rental. Reiwa.com data shows the December vacancy rate is again below one per cent. To put this into perspective the Sydney vacancy rate is 3.3 per cent and in Melbourne it’s 5.4 per cent.
Corelogic data for December follows a now well-established trend across all capital cities where house rents have shown a more positive trajectory than unit rents since the onset of COVID-19. Although rent prices are surging, prices are still substantially lower than they were during the previous peak in 2013.
On the other side of the country rental conditions are much softer, with the Melbourne and Sydney unit markets suffering, where weak demand and high supply has driven a sharp drop in rent prices as demand falls due to the lack of overseas migration.
Residential sales market
Clearly our housing markets were not immune to the COVID-19 economic fallout, but those house price predictions of significant falls did not eventuate, and now real estate prices around Australia are starting to lift as confidence is restored.
Despite the volatility, national home values finished on a high in 2020, with CoreLogic’s home value index rising three consecutive months in a row, following a 2.1 per cent drop during COVID-19 (April – September 2020). If we look around the country, dwelling values in December 2020 compared to March 2020 increased in most capital cities, except for Sydney and Melbourne where longer lockdowns were experienced.