There’s no escaping the impact COVID-19 is having on the economy except, that seems, in the real estate market.
At least that’s the case so far, with the average Perth dwelling price rising 0.2% in April despite business closedowns and rising unemployment.
How Perth’s property market has performed in early 2020
The Perth real estate market started 2020 solidly, with prices rising 0.9% over the first three months of the year and another 0.2% in April, according to CoreLogic’s official data. This growth comes on the back of prices rising 0.7% in the December 2019 quarter.
The median Perth dwelling price now stands at $448,355, with houses selling for a median price of $465,521 and units a median price of $359,306.
As you might expect, the recent growth in Perth’s market hasn’t been shared evenly. According to REIWA, top-performing suburbs over the past 12 months include waterside suburbs North Fremantle (up 29.9% to $1.15 million), Burswood (up 19.3% to $960,000), Waterford (up 19.1% to $1,072,500) and South Perth (up 5.5% to $1.35 million).
Lower activity to cushion the impacts of COVID-19?
One of the main reasons Perth property prices have remained stable is that stock levels are low. REIWA reports that there were just 11,638 properties for sale in Perth for the week ending 3 May 2020. That’s down 2.2% from the week before and a massive 30% below the number of listings from this time last year.
Fewer properties on the market means buyers have less choice. This usually helps drive competition and can put a marker under property prices, even when economic conditions are soft.
That said, the WA economy is unlikely to suffer as badly from the effects of COVID-19 as the service-industry-reliant economies of the Eastern States.
So, with interest rates at new record lows, perhaps there is cause for muted optimism that Perth will outperform Australia’s other capital cities in the next 12 months – something that hasn’t happened for a decade.
Perth’s rental market in early 2020
As with the sales market, the Perth rental market has held up well over the four months in 2020. In fact, CoreLogic data showed we were the only capital city in Australia to record growth in rents over April.
The gross annual yield in Perth also lifted 1.69% in the 12 months to May, to stand at a healthy 4.3%. This compares to 3.2% in Melbourne and just 2.9% in Sydney.
REIWA reported that the number of rental properties in Perth is falling in a similar pattern to sales, with rental activity decreasing 9.5% in the week to 3 May. The number of Perth properties for rent stood at 5,602 over the same week. Although this is 2.4% higher than four weeks ago, it is 23% lower than the same time last year.
The rental market and COVID-19
While there are fewer properties than usual on the Perth market right now, landlords should be aware that the State government has introduced new regulations which prevent you from evicting tenants who cannot pay the rent until at least October this year.
If you find yourself in a position where a tenant is suffering financial hardship and can’t meet their rental payments, we strongly advise you to contact us to work out a suitable solution.
You can read more about your rights and obligations during the current pandemic here.
Get in touch
You’ll be pleased to know it’s business as usual for us during COVID-19, get in touch if you’d like any help.