Perth’s housing market is the most favourable it has been for buyers in five years, according to Real Estate Institute of Western Australia (REIWA) and Curtin University’s latest Buy-Rent Index.
REIWA President Damian Collins said that data from Landgate, also known as the Western Australian Land Information Authority, showed that Perth’s median house price is the most affordable it’s been in six years. REIWA also found that Perth’s median house rent increased by $10 per week during the September 2018 quarter. With this development, the recent Buy-Rent Index has shifted more heavily in favour of buying.
Declining mortgage rates also contributed to the improvement in affordability. Mortgage rates’ 10-year average dropped from 7.3% between 1998 and 2008 to 6.2% during the last decade.
“The current Perth median house price would only have to increase to $658,000 by 2028 to be considered more financially advantageous than renting. This bodes very well for Perth buyers, considering the 15-year annual average house price growth rate is 5.1%,” Collins said.
J-Han Ho, property researcher and senior lecturer in the school of economics, finance and property at Curtin University, said the results imply a great outlook for the Western Australian housing market.
“Perth’s housing market is very attractive when you consider the cost of housing, distance from the CBD or major activity centres, housing quality and size, and amenities available in every precinct,” Ho said.
According to Ho, the state government’s International Education Strategy and Graduate Skilled Migration list, which was introduced in 2018, and the changes to immigration policies by both state and federal government in 2019, could drive an increase in demand for housing.
He also said that planned mining investments and retail centre developments could also help to improve employment figures and consumer confidence in Western Australia.
The Buy-Rent Index is released quarterly to help determine the best time to buy or rent in Perth. It is based on formulated economic assumptions that help identify the annual house price growth rate required for home ownership to be considered more financially advantageous than renting.
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