While house prices in many capital cities around the country are falling, the Perth market remains resilient. There are still a lot of unknowns going into 2023; however when reflecting on the key market drivers and results of Q4 2022, it does appear Perth is well placed for growth this year. This is also supported by REIWA who are forecasting price growth between 2% and 5% for 2023.
Mining, unemployment, and population growth remained strong in WA through Q4 2022 which in combination with low supply, strong demand, a historically tight rental market, and the greatest affordability in the country, has kept the Perth market afloat through Q4 2022. This is likely to continue into 2023. We have seen strong sales results so far this year with even lower stock levels than in January 2022, and the average days on market for Perth was reported at only 15 days in December 2022.
While the Perth real estate market has withstood the barrage of interest rate rise so far, the volume of growth in 2023 could largely be linked to how many more rate rises are to come. Inflation is a big factor here. Based on the most recent inflation reports, some early rate rises in 2023 are still predicted by many experts. However, thereafter there’s a strong chance that rates begin to reverse mid to late 2023 as inflation is widely expected to ease. If the Perth market can at least go close to holding ground during this time, in my opinion, there’s a very good case for moderate to strong growth thereafter (assuming most other key market drivers remain strong).
2023 is sure to be an interesting year for Perth. However, there are some key changes in our local markets that we should take note of now. Buyers’ are certainly more cautious in their decision making and this has resulted in a flight to quality! For those properties that are in need of work, lacking light, are of poor design, or on busier roads etc, buyers are typically expecting bigger discounts on prices. However, the better properties are still selling well. Sales strategy, pricing strategy, presentation and marketing of properties is even more important now if you still want that top result. I can’t stress this enough, and those who don’t get this right will risk being exposed to longer sales campaigns and potential price reductions.
If you’re wondering where your property sits in the current market, we can provide a complimentary and obligation-free price update on your property.
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