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WA Property Market Update August 2024

The Western Australian property market has shown significant shifts in recent months, influenced by rising home loan costs, interest rates, and increased investor activity. Both the residential and retail sectors have been impacted by economic factors, affecting property affordability, values, and rental prices. Let’s have a look at key developments in the WA property market as of August 2024, with insights into the current state of residential and retail properties, and a review of current home loan cost trends in WA and across Australia.

Home Loan Cost Review

Home loan costs in Western Australia have reached unprecedented levels, with the average loan size for owner-occupiers increasing significantly. According to the Australian Bureau of Statistics (ABS), the average home loan for owner-occupiers in WA rose by nearly 17%, from $472,000 in July 2023 to over $552,000 in July 2024. This increase is part of a national trend, with the average loan size for Australian owner-occupiers hitting a record high of $641,000. Interest rates remain elevated, discouraging expectations of immediate relief. Investors, meanwhile, continue to dominate the market, with investor loan approvals nearly doubling those for owner-occupiers. The surge in loan values and investor activity highlights the ongoing affordability crisis in Australia, where first-home buyers and median-income households face increasing challenges.

WA Residential Property Market Update August 2024

Western Australia’s residential property market remains robust, with limited supply and high demand contributing to rising home values. Mid-range properties valued between $500,000 and $800,000 have become increasingly popular, particularly those with renovation potential. Buyers are seeking opportunities to enhance property value through renovations, a strategic move in a tight housing market. Suburbs like Kelmscott and Camillo have seen impressive price growth due to their affordability and strong rental yields. Renovated properties in these areas have shown remarkable value increases, with some homes doubling or tripling their sale prices within a year. The state government’s Vacant Property Rental Incentive Scheme has also impacted the market by encouraging property owners to rent rather than sell, contributing to the housing shortage.

WA Retail Property Market Update August 2024

The retail property market in WA has experienced mixed fortunes, with office spaces in particular facing challenges. The lingering effects of the COVID-19 pandemic have resulted in subdued activity, especially in Perth’s CBD. However, suburban areas are seeing more interest from small businesses looking for affordable office assets. Owner-occupiers are drawn to properties where mortgage repayments can be more cost-effective than renting, particularly when these assets are held in self-managed superannuation funds. The hybrid working model, which became popular during the pandemic, has reduced demand for large office spaces, contributing to a gradual shift towards smaller premises. Despite the oversupply of office spaces, there has been some upward pressure on rental prices, particularly in fringe CBD locations where supply is constrained. Strata-titled office suites in desirable areas like Subiaco are seeing modest interest, with prices ranging from $4,000 to $6,500 per square metre.

Looking Ahead

As has been the case for a few years now, the Western Australian property market is undergoing notable changes, driven by rising home loan costs, increased investor activity, and shifts in the residential and retail sectors. The affordability crisis continues to challenge first-home buyers and owner-occupiers, while investors take advantage of favourable conditions. In the retail market, suburban office spaces offer opportunities for small businesses, though the hybrid working model has reshaped demand. As economic factors like interest rates and inflation continue to play a pivotal role, property values and rental prices are expected to fluctuate, making it essential for buyers and investors to stay informed about market trends.

With the current economic climate posing significant challenges and opportunities, finding the best deal on your Home or Commercial property loans is key. Our Finance team offer a complimentary loan health check to determine if your current loans stack up, and then work with you to find a better deal elsewhere or renegotiate with your current lender as required. Call us today on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.

References & Further reading:

https://www.sbs.com.au/news/article/home-loans-have-reached-a-new-high-heres-how-much-the-average-owner-is-borrowing/6nqxy38st

HTW Month in Review August 2024

written by:

Paul Moran

Paul has over 35 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.