Following a challenging year, the Sydney property market is still struggling to bounce back with a 10.88% drop in house prices year-on-year and a drop of 1.8% in median weekly rent for houses and 2.8% drop for units.
While the Sydney property crash is expected to continue well into the first half of 2018, the Perth property market is signalling a turnaround: the median weekly house rent price increased 2.9% in 2018 and rental yields for apartments increased by 2.7% in Q4 2019.
So what does this mean for property investors and homeowners?
Why is the Perth property market performing so well?
According to experts, the upturn in Perth’s rental prices is largely due to the combination of an improving local economy, and a tightening rental market.
Western Australia experienced an uplift in jobs last year, and now has strongest job market in all of Australia. With over 20,000 jobs added in 2018, Perth is seeing an employment boom as the mining sector picks up pace and the state government continues its tourism push.
Full time workers in Perth also have the highest median weekly income, earning $1,400 per week. In comparison, Sydney’s median weekly income is $1,305 and Melbourne’s is $1,280.
Meanwhile, there have been fewer apartment listings and a slowdown in the construction of new apartments. Rental vacancies have halved in recent years in Perth, dropping to 3.9% compared to 7.3% in July 2017, and only 8,779 dwellings were approved in 2018 - making it the worst year for home approvals since 2000. All of this has led to increased competition in WA’s capital.
“Demand for rental accommodation will be supported by an improving jobs market and local economy, giving residents greater incentive to stay and new residents reason to relocate west,” says Domain senior research analyst Nicola Powell.
Perth property market predictions for 2019
Unlike the Sydney and Melbourne property market crash that is expected to continue in the first half of 2019, the Perth property market news today indicates that the market is on its way to recovery.
The renewed optimism on the jobs market and the shortage of new properties in the pipeline will mean fierce competition between tenants; meanwhile, buyers are hesitating to jump into the market due to uncertain conditions as a result of the Royal Commission, the housing slump, and the Federal Election.
For property investors looking to get ahead, now may be the time to sell property in Sydney and Melbourne and consider investing in Perth instead - particularly with continued dips in the property market in the last quarter, and predictions that the RBA will increase interest rates in the coming year
“The fact we have got Sydney and Melbourne now deteriorating in the short to medium term in terms of that capital gain, I think investors have already started to look at other areas to invest in the property market and I think Perth is certainly an area that may come on an investor’s culling list,” said Dr Powell.
And, regardless of whether you’re selling or buying property in 2019, it’s essential to keep up-to-date on the latest news in the housing market, in order to understand how Australia’s property market trends will affect you.
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If you’re looking to sell in 2019, Upside can help you get more for your property. Get started with a free, no-obligation property appraisal today!