How has the Perth real estate market faired in what has been a Topsy-Turvy TwentyTwenty? Well, surprisingly at the half year mark, the Perth real estate market is experiencing an incredibly buoyant period. There are several factors that have created a “Perfect Storm” for our industry.
1. The final quarter of 2019 saw a stabilisation of what was a falling market for about 6 years. Record low interest rates (which have gotten even lower during 2020), population growth and the mining industry making noise again rallied positive sentiment across most business sectors
2. The holiday season (Dec/Jan) traditionally sees a slow down in the supply of new
properties. February, after school is back and life returns to normal tends to be the trigger for most people to take the big plunge and go to market, but this was not to be in 2020 (keep reading)
3. March 2020 saw the introduction of a new villain to the world stage, Covid-19! Aside from reactionary toilet paper stockpiling, many sellers opted to withdraw their homes from the market and those getting ready for the “March Listing Period” put plans on hold during what looked to be a “Lock-down” of some sort on the horizon. So supply of new properties went stagnant.
4. I must admit, I didn’t anticipate this factor in the least… Buyer demand INCREASED during the “Isolation” period, despite the challenging environment. Then, we saw an influx of expatriates return to Western Australia and many within the mining sector relocate to WA to avoid quarantine periods when flying in and out from interstate.
5. Government stimulus has certainly played a part in helping families in financial distress keep their homes, assisting businesses to stay afloat without dismissing staff and provide significant incentives for buyers to invest in property with the state and federal building grants as well as the existing first home buyer grant. This has given confidence for buyers to invest in both established and newly built homes which has contributed to increasing buyer demand in the later half of 2020.
So to put this into perspective in the form of real measurable data; in 2019 it was common to see around 14,500+ properties for sale across the Perth Metro area. Now, we have dropped to 10,200 properties with over 1300 properties selling in a single week in July and multiple weeks with 1000+ properties being sold since which hasn’t happened since 2013… that is a huge decline in supply with demand showing no immediate signs of easing.
Of course, this is a distilled version of what is a complex local and global environment. The question is, how long will this current environment last?