RESIDENTIAL property buyers are enjoying their most favourable conditions in Perth in five years, according to the REIWA and Curtin University’s Buy-Rent Index.
The index is based on formulated economic assumptions that identify the annual house price growth rate required for home ownership to be considered more financially advantageous than renting.
In the September 2018 quarter, the Buy-Rent Index showed median house prices in Perth would only need to increase by 2.9% annually over the next 10 years to $658,000 for house purchases to be considered more financially viable than renting.
“With Landgate data showing Perth’s median house price is the most affordable it’s been in six years and reiwa.com data showing Perth’s median house rent increased by $10 per week during the September 2018 quarter, the latest Buy-Rent Index has shifted more heavily in favour of buying,” REIWA president, Damian Collins said.
“This bodes very well for Perth buyers, considering the 15-year annual average house price growth rate is 5.1%.”
Another driver of improving affordability is declining mortgage rates, with the 10-year average felling from 7.3% to 2008, to 6.2% in the decade since.
J-Han Ho, property researcher and senior lecturer in the school of economics, finance and property at Curtin University, said the data continued to show great optimism for the Western Australian housing market in the near future.
“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.
He said the state government’s International Education Strategy and Graduate Skilled Migration list introduced in 2018, and immigration policy changes at both state and federal level in 2019, could be the catalyst for an increase in demand for housing.
“Planned mining investments and retail centre developments should also help to improve employment figures and consumer confidence in WA.”
Australian Property Journal