prowest 18 December 2018
REIWA and Curtin University’s latest Buy-Rent Index shows Perth is the most favourable it has been for buyers in five years.
Released quarterly, the Buy-Rent Index helps determine the best time to buy or rent in Perth, based on formulated economic assumptions that help identify the annual house price growth rate required for home ownership to be considered more financially advantageous than renting.
REIWA President Damian Collins said the September 2018 quarter Buy-Rent Index showed median house prices in Perth would only need to increase by 2.9 per cent annually over the next 10 years for house purchases to be considered more financially viable than renting.
“With Landgate data showing Perth’s median house price is the most affordable it’s been in six years and reiwa.com data showing Perth’s median house rent increased by $10 per week during the September 2018 quarter, the latest Buy-Rent Index has shifted more heavily in favour of buying. Another contributing factor to the improvement in affordability is declining mortgage rates, with the 10-year average having dropped from 7.3 per cent (1998 – 2008) to 6.2 per cent during the last decade (2008 – 2018).
“The current Perth median house price would only have to increase to $658,000 by 2028 to be considered more financially advantageous than renting. This bodes very well for Perth buyers, considering the 15-year annual average house price growth rate is 5.1 per cent,” Mr Collins said.
Mr J-Han Ho, Property Researcher and Senior Lecturer in the School of Economics, Finance and Property at Curtin University, said the data continued to show great optimism for the Western Australian housing market in the near future.
“Perth’s housing market is very attractive when you consider the cost of housing, distance from the CBD or major activity centres, housing quality and size, and amenities available in every precinct,” Mr Ho said.
“The State Government’s International Education Strategy and Graduate Skilled Migration list that was introduced in 2018, along with changes to immigration policies by both State and Federal government in 2019, could be the catalyst for an increase in demand for housing.
“Planned mining investments and retail centre developments should also help to improve employment figures and consumer confidence in WA.”
SOURCE: REIWA
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