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WA Property Market Update September 2024

The Western Australian property market is facing significant developments, driven by the finite and invaluable resource of land. While buildings may depreciate over time, land tends to retain its value, particularly as population growth fuels demand for housing and industrial developments. In this month’s update, we explore how rising construction costs, land shortages, and a strong economy are affecting both residential and industrial property sectors. From escalating house prices to a growing demand for industrial spaces, here are some key trends in the WA property market for September 2024.

WA Residential Property Market Update – September 2024

Land in Western Australia, particularly in the Perth metropolitan area, is experiencing sharp price increases, with new land in metro areas now averaging over $300,000, a level not seen since 2007. A strong demand for housing, coupled with limited supply, is pushing prices higher, with some areas, such as Baldivis, seeing land value increases of up to 52% over the past year. The recent growth in land values is primarily due to the booming population and inflationary pressures on development costs, making it difficult for developers to keep up with demand.

First home buyers, owner-occupiers, and investors are showing almost equal interest in purchasing land, particularly in outer suburbs where housing is more affordable. However, this demand is further exacerbating the shortage of land and housing supply, leading to record price surges in previously overlooked areas like Armadale and Two Rocks. Regional areas, including Mandurah, are also experiencing heightened demand, especially for oceanfront properties and affordable residential land.

WA Industrial Property Market Update – September 2024

The industrial property market in Perth continues to experience strong growth, with small-scale industrial units in secondary precincts being the most affordable option for business owners and investors. These properties, often priced under $500,000, are popular among small business owners and hobbyists seeking more affordable occupancy costs compared to leasing. Owner-occupiers have been taking advantage of historically low-interest rates to secure properties that offer better long-term value than renting.

Despite the development of new industrial estates across Perth, including Tonkin Highway Industrial Estate and Meridian Park in Neerabup, demand continues to outstrip supply. The scarcity of modern, well-located industrial properties has driven up prices, with recent sales indicating price ranges from $1,250 per square metre in outer suburbs to as high as $3,500 per square metre in prime areas. Market yields for leased properties remain attractive, ranging between 5.5% and 7%, depending on location, age, and quality of construction.

Looking Ahead

The Western Australian property market is showing no signs of slowing down as both residential and industrial sectors face significant demand pressures. Rising construction costs and limited land supply continue to drive up prices, making it more difficult for first home buyers and businesses to find affordable property. However, the market remains dynamic, with opportunities available for those who can navigate the current trends. Whether it’s purchasing land in growth areas like Baldivis or investing in industrial units across Perth, now is a critical time for property investors and buyers to stay informed and act strategically.

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.

Data from: HTW Month in Review September 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.