It is an interesting time to be in the Perth property investment market, given the impact of the pandemic on the economy and how things are poised to evolve during the coming year. If you have been watching this space looking for inroads, the outlook suggests that 2021 may be a good time to finally get your foot in the door.
Focusing on our state (of Western Australia) alone, both the metro and the regional markets have performed well and the prices that had fallen over the last few years are now rebounding. There is growing personal and business confidence that this trend will continue.
The Real Estate Institute of Western Australia (REIWA) has predicted that property prices will rise by as much as 15% this year. There are numerous reasons behind the shift and we will shed some light on these through this blog post.
While it can be a lucrative time to venture into the market, there are still uncertainties, complexities and risks that you need to consider. This is where we can assist. At Oakmont, we are committed to guiding and advising our clients even as the situation evolves.
1. Effective containment of the pandemic
Australia (and Australians) have shown great resilience and tenacity ever since the start of the pandemic in March-April last year. Outbreaks and community transmissions have been well-contained, quickly and effectively. There have only been a handful of lockdowns and we are largely unrestricted and free. Added to this, is the vaccine rollout that started in late February this year that has further boosted confidence and positivity.
2. Timely reopening of the economy
Given the advantage of a sustained pandemic response and reduced risk, we were able to open up our local economies for activity and trade. There has been considerable economic recovery throughout this time and Australia is continuing to emerge. What this has meant is that while we were prepared for more severe consequences, in the end, there were fewer restrictions imposed on personal and business activity – leaving us with an overall positive financial impact.
3. Government action to offset damage
Next, the government stepped in to offset the damages caused by the pandemic with – the JobKeeper (wage subsidy) and JobSeeker (unemployment benefit supplement) initiatives. Many lenders offered deferrals on repayments for both mortgages as well as small business loans. The RBI offered rate cuts. The WA Premier announced a temporary moratorium on rent increases, urging property owners to refrain from changing the conditions of the lease agreements or evicting tenants. (The moratorium was lifted in March 2021.)
4. Clear action within the property market
Clear and significant support measures were put in place within the housing and construction sector that helped the situation. For example, grants were made available to underwrite the construction of new homes including major renovations, such as those available through the HomeBuilder program. First home buyers were also given help with the First Home Loan Deposit Scheme (FHLDS) – to purchase a modest home with a deposit of as little as 5% and no lenders mortgage insurance applicable.
5. Here in Perth, Western Australia
All four of the points discussed above contributed positively to the state of the Australian property market. However, we have had a few added benefits here in Perth, Western Australia.
A near return to normalcy on interstate and intrastate migration and a strong performance by the resources sector has helped take Perth’s property market ahead of other Australian cities. In the words of REIWA President, Damian Collins – “Western Australia remains the most affordable state in the country, given the income to median house pricing.”
Buyers and sellers alike are gearing to take advantage of the situation and the record low interest rates. It is an interesting time to be investing in the Perth property market indeed, but how do you ensure that you overcome the challenges, complexities and uncertainties of the situation and come out a winner – maximising your benefits?
The answer lies in taking on a trusted adviser.
Oakmont Financial Group
At Oakmont, we understand the complexities of the property market that is changing and evolving as we speak. We can help you make those crucial decisions that push you closer to your financial goals and keep compromises to a minimum. We think long-term so you can navigate the market with ease and confidence knowing – we are always in your corner.
Talk to us about your property investment aspirations in an obligation-free call today. We will be delighted to hear from you.
General Advice Disclaimer
The information contained on this website and in this blog post is general in nature and does not take into account your personal situation or circumstance. It is recommended that you consider and use the information provided responsibly and, where appropriate, seek professional advice from a financial adviser.
Although every effort has been made to verify the accuracy and correctness of information, Oakmont Financial Group, together with our consultants, officers, agents, and employees, disclaim all liability for any loss or damage suffered by any persons directly or indirectly relying on this information.
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