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WA Property Market Update February 2024

2023 emerged as a year of robust growth and significant transformations in the WA Property Market, with more of the same expected through February and the rest of 2024. Anchored by increasing median house prices in Perth, the market demonstrated resilience and appeal and maintained its status as the second most affordable capital city in Australia despite its growth. While there are challenges posed by economic uncertainties and shifts in construction costs, the Western Australian property market is positioned for continued optimism in 2024. Here’s our update for February.

WA Residential Property Market Update February 2024

The Western Australian property market, particularly in Perth, witnessed substantial growth throughout 2023, with residential properties enjoying a median house price increase of 12.76%. Despite this growth, Perth remains one of Australia’s most affordable capital cities. The affordability, coupled with optimistic market performance expectations for 2024, underscores a resilient residential sector despite economic uncertainties.

A pause in interest rate hikes and the stabilisation of core inflation in late 2023 have provided a more positive outlook for property buyers and investors. However, challenges persist in the construction industry, notably the exit of major builders and the rising cost of construction materials. These factors, along with a significant decrease in dwellings approved, have placed additional pressure on the housing market.

Western Australia’s population growth, driven by over 73,000 newcomers up to June 2023, has intensified demand for housing. With construction unable to keep pace, this has resulted in a significant shortage of available properties for sale, exacerbating the pressure on prices and rental values. The rental market in Perth has remained tight, with median rents for houses and units increasing by approximately 20% in 2023. A lack of rental stock has led to increased rental values, pushing more tenants towards considering homeownership, despite the challenges in saving for a deposit due to rising rental costs.

WA Office Property Market Update February 2024

The Perth office market is poised for recovery in 2024, buoyed by the city’s strong economic fundamentals and a focus on sustainability. Despite a slight increase in the CBD’s total vacancy rate, demand from the mining and resources sector and professional service firms has led to a positive shift in West Perth’s vacancy rates.

The continuing trend towards hybrid work models is causing companies to reassess their space requirements, leading to stronger demand for premium and A-grade spaces, and reduced demand for lesser grades. A growing focus on environmental sustainability is influencing tenant and landlord decisions, with an increased emphasis on retrofitting buildings to meet ESG principles. The market could see high net worth investors and local syndicates targeting older stock for refurbishment or repurposing, reflecting the evolving dynamics of Perth’s commercial real estate sector.

Looking Ahead

The Western Australian property market, both residential and commercial, is at a pivotal juncture. The residential sector is buoyed by relative affordability (at least compared to the Eastern States markets), population growth, and an optimistic outlook despite construction and supply challenges. The commercial market, particularly in office space, anticipates a recovery driven by economic fundamentals and a shift towards sustainability. As the market adapts to these trends, the emphasis on meeting demand through increased supply and innovative solutions will be crucial for sustaining growth and addressing the challenges ahead.

As interest rates level off (and potentially come down a couple of times through the year), many WA borrowers are finding themselves in a strong equity position, with the potential to refinance their home loans and unlock cash for renovations, investment properties, and more. If you would like to explore the options you have available to you, please don’t hesitate to contact the McKinley Plowman Finance team for a complimentary loan review. You can reach us at 08 9301 2200 (Joondalup), 08 9325 2411 (Perth), or via our website.

Data From: HTW Month in Review February 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.