Is it the right time to invest in the current market?

3 December 2022
Matthew Hughes

With prices holding firm in October and November, the Perth market continues to weather the rate rise storm better than any other capital city in Australia.

“It is pleasing to see Perth home values were relatively stable in October; to put things into perspective, Brisbane’s home value index declined 2.0 per cent and Sydney’s declined 1.3 per cent,” REIWA CEO Cath Hart said.

In a recent article from API Magazine, Perth was identified as the only “rising market” in the country, according to Herron Todd White’s recent National Property Clock.

In addition to this, SQM Research just released their 2023 outlook, outlining a range of scenarios that relate to monetary policy and economic data – all four scenarios predicted Perth to experience moderate to high growth in 2023.

Affordability supply of investment opportunities

Among the allure factors that continue to attract investors’ interest from around the country, affordability and stock levels play a big role.

According to REIWA CEO Cath Hart,

“The main drivers for this are the low level of stock and our affordability, with Perth median house prices the cheapest of any capital city”.

There is a huge supply available for investment opportunities for less than $600,000, with 56% of Perth properties falling below this benchmark price.

The stats for other capital cities are very different, with a low 11% for Sydney and 38% in Brisbane.

These figures further reinforce Perth’s affordability as a strong investment allure in Australia.

“There is nothing in the Perth property market right now indicating that house prices will fall drastically any time soon,” Ms Hart said.

What’s more, the interest rate rises haven’t affected the rate at which Perth properties are being sold.

Light at the end of the tunnel

Over the past months, we heard and spoke much about a potential “light at the end of the tunnel” in relation to interest rate increases.

Now, we can see this “light” materialising, in the form of some positive inflation data released by the RBA this week.

According to a recent AFR article,

“The Reserve Bank of Australia may not have to raise interest rates as high as expected after the October consumer price index showed inflation surprisingly slowed last month, though not enough to derail an expected cash rate rise next week.”

If this is a trend and not an anomaly, we can expect confidence to return to the markets. And we that, we expect to see investors flood back into Perth.

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Written by Terry Rider and Matthew Hughes

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